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TMI BlogDUTY EXEMPTION & REMISSION SCHEMESX X X X Extracts X X X X X X X X Extracts X X X X ..... hich benefit of DBK is claimed. ADVANCE AUTHORISATION SCHEME Advance Authorisation 4.1.3 An Advance Authorisation is issued to allow duty free import of inputs, which are physically incorporated in export product (making normal allowance for wastage). In addition, fuel, oil, energy, catalysts which are consumed/ utilised to obtain export product, may also be allowed. DGFT, by means of Public Notice, may exclude any product(s) from purview of Advance Authorisation. Duty free import of mandatory spares upto 10% of CIF value of Authorisation which are required to be exported/ supplied with resultant product are allowed under Advance Authorisation. Advance Authorisations are issued for inputs and export items given under SION. These can also be issued on the basis of Adhoc norms or self declared norms as per para 4.7 of HBP v1. Advance Authorisation can be issued either to a manufacturer exporter or merchant exporter tied to supporting manufacturer(s) for: i) Physical exports (including exports to SEZ); and/ or ii) Intermediate supplies; and /or iii) Supply of goods to the categories mentioned in paragraph 8.2 (b), (c), (d), (e), (f), (g), (i) and (j) of FTP ; iv) supply of ' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lment of export obligation. 4.1.6 1[Advance Authorisation necessitates exports with a minimum value addition of 15%, except for items specified in Appendix 11B of HBP v1 and for items in Gems & Jewellery Sector, for which value addition would be as per paragraph 4A.2.1 of HBP v1.] Exports to SEZ Units/ supplies to Developers / Co-Developers, irrespective of currency of realization, would also be covered. For physical exports for which payments are not received in freely convertible currency, same shall be subject to value addition as specified in Appendix-11 of HBP v1. In case of Authorisation for import of Tea, minimum value addition under Advance Authorisation shall be 50%. Similarly, in case of spices {covered by Chapter 9 of ITC(HS)}, duty free import of spices shall be permitted only for value addition purposes like crushing / grinding / sterilization or for manufacture of oils and oleoresins and not for simple cleaning, grading, re-packing etc. 4.1.7 Advance Authorisation shall be issued in accordance with Policy and procedure in force on Authorisation issue date. Validity period of Advance Authorisation for import shall be as prescribed in HBP v1. Free of Cost Supply ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ARO or Invalidation letter, avail of the facility of Back-to-Back Inland Letter of Credit in accordance with procedure specified in HBP v1. Prohibited Items 4.1.13 Prohibited items of imports mentioned in ITC(HS) shall not be imported under Advance Authorisation / DFIA. Further items reserved for imports by STEs cannot be imported against Advance Authorisation / DFIA. However those items can be procured from STEs against ARO or Invalidation letter. STEs are also allowed to sell goods on High Sea Sale basis to holders of Advance Authorisation / DFIA holder. In addition, STEs are permitted to issue "No Objection Certificate (NOC)" for import by advance Authorisation/ DFIA holder. Authorisation Holder would be required to file Quarterly Returns of imports effected against such NOC to concerned STE and STE would submit half-yearly import figures of such imports to concerned administrative Department for monitoring with a copy endorsed to DGFT. Similarly prohibited items of exports mentioned in ITC(HS) shall not be exported under Advance Authorisation / DFIA scheme. Export of restricted items shall be subject to all conditionalities or requirements of Export Authorisation or permi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t for transferability of Authorisation or inputs imported against it may be made before concerned RA. Once, transferability is endorsed, Authorisation holder may transfer DFIA or duty free inputs, except fuel and any other item(s) notified by DGFT. However, for fuel, import entitlement may be transferred only to companies which have been granted authorisation to market fuel by Ministry of Petroleum and Natural Gas. Once transferability is endorsed, imports / domestic procurement against authorisation or transfer of imported inputs / domestically procured inputs shall be subject to payment of applicable additional customs duty / excise duty. While endorsing transferability, authorisation would bear a note as to liability of such additional customs duty / excise duty. However, in case where CENVAT facility has not been availed, exemption from additional customs duty/ excise duty would be available even after endorsement of transferability on DFIA. Wherever SIONs prescribe actual user condition and in case of Acetic Anhydride, Ephedrine and Pseudo-Ephedrine, DFIA shall be issued with actual user condition for these inputs and no transferability shall be allowed for these inputs even ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erability 4.3.4 DEPB and / or items imported against it are freely transferable. Transfer of DEPB shall however be for import at specified port, which shall be the port from where exports have been made. Imports from a port other than the port of export shall be allowed under TRA facility as per terms and conditions of DoR notification. Applicability of Drawback 4.3.5 Additional customs duty / Excise Duty and Special Additional Duty paid in cash or through debit under DEPB may also be adjusted as CENVAT Credit or Duty Drawback as per DoR rules. GEMS AND JEWELLERY Scheme for Gems and Jewellery 4A Exporters of gems and Jewellery can import / procure duty free inputs for manufacturing. Replenishment Authorisation 4A.1 Exporters may obtain Replenishment (REP) Authorisations from RA in accordance with procedure specified in HBP v1. 4A.1. Replenishment authorisation may also be issued for consumables & tools as per paragraph 4A.28 of HBP v1. Import of Diamonds for Certification/ Grading & re-export 4A.2 The authorized offices/agencies in India of Gemological Institute of America (GIA) or any other agency approved in this regard, shall be permitted to import diamonds to their ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be calculated as under: VA = A - B / B x 100, where A = FOB value of the export realised / FOR value of supply received. B = Value of inputs (including domestically procured) such as gold / silver / platinum content in export product plus admissible wastage along with value of other items such as gemstone etc. Wherever gold has been obtained on loan basis, value shall also include interest paid in free foreign exchange to foreign supplier. Wastage Norms 4A.7 Wastage or manufacturing loss for gold / silver / platinum jewellery shall be admissible as per paragraph 4A.2 of HBP v1. Export against Supply by Foreign Buyer 4A.8 Where export orders are placed on nominated agencies/ status holder / exporters of three years standing having an annual average turnover of Rs. Five Crores during preceding three licensing years, foreign buyer may supply in advance and free of charge, gold / silver / platinum, alloys, findings and mountings of gold / silver / platinum for manufacture and export. Such supplies can also be in advance and may involve semi-finished jewellery including findings / mountings / components for repairs / re-make and export subject to minimum value addition of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t to conditions as in HBP v1. Personal Carriage of Export / Import Parcels 4A.15 Personal carriage of gems and jewellery export parcels by foreign bound passengers and import parcels by an Indian importer/foreign national may be permitted as in HBP v1. Export by Post 4A.16 In case of exports through Foreign Post Office (including via Speed Post), value of jewellery parcels shall not exceed US$ 75000 and 20 kg. by weight. Diamond & Jewellery Dollar Accounts 4A.17 Firms and companies dealing in purchase/ sale of rough or cut and polished diamonds/precious metal jewellery plain, minakari and / or studded with / without diamond and/or other stones, with a track record of at least two years in import or export of diamonds / coloured gemstones/ diamond and coloured gemstones studded jewellery / plain gold jewellery, and having an average annual turnover of Rs. 3 crores or above during preceding three licensing years, may also carry out their business through designated Diamond Dollar Accounts (DDA). Dollars in such accounts available from bank finance and/ or export proceeds shall be used only for: (i) Import / purchase of rough diamonds from overseas/local sources; (ii) Purcha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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