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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 ..... hysically incorporated in export product (making normal allowance for wastage). In addition, fuel, oil, catalyst which is consumed / utilized in the process of production of export product, may also be allowed. (b) Advance Authorisation is issued for inputs in relation to resultant product, on the following basis: (i) As per Standard Input Output Norms (SION) notified (available in Hand Book of Procedures); OR (ii) On the basis of self declaration as per paragraph 4.07 of Handbook of Procedures. OR (iii) Applicant-specific prior fixation of norm by the Norms Committee as per para 4.06 of Handbook of Procedures. OR (iv) On the basis of Self Ratification Scheme in terms of Para 4.06 of Foreign Trade Policy. 4.04 Advance Authorisation for Spices Duty free import of spices covered under Chapter-9 of ITC (HS) shall be permitted only for activities like crushing / grinding / sterilization / manufacture of oils or oleoresins. Authorisation shall not be available for simply cleaning, grading, re-packing, etc. 4.04A Special Advance Authorisation Scheme for export of Articles of Apparel and Clothing accessories Duty free import of fabric under Special Advance Authorisation Scheme for export ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4, 4.15, 4.17, 4.19, 4.21(i), 4.21(ii), 4.21(iii), 4.21(iv), 4.22, and 4.23 of Foreign Trade Policy shall be applicable in so far as they are not inconsistent with this scheme. 4.05 Eligible Applicant / Export /Supply (a) Advance Authorisation can be issued either to a manufacturer exporter or merchant exporter tied to supporting manufacturer. (b) Advance Authorisation for pharmaceutical products manufactured through Non-Infringing (NI) process (as indicated in paragraph 4.18 of Handbook of Procedures) shall be issued to manufacturer exporter only. (c) Advance Authorisation shall be issued for: (i) Physical export (including export to SEZ) (ii) Intermediate supply; and/or (iii) Supply of goods to the categories mentioned in paragraph 7.02 (b), (c), (d), (e), (f) and (g) of this FTP. (iv) Supply of stores on board of foreign going vessel / aircraft, subject to condition that there is specific Standard Input Output Norms in respect of item supplied. 4.06 Self-Ratification Scheme (i) Where there is no SION/valid Adhoc Norms for an export product or where SION has been notified but exporter intends to use additional inputs in the manufacturing process, eligible exporter can apply for a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of norms and to abide by the decision of the said Committee. d) In case of situation as at (c) above, no further authorisation under this scheme para will be issued. e) The DGFT may deny authorisation under this scheme para to two star and above status holder based on its risk management principles. f) Status holder shall be audited by the DGFT as laid down in the Handbook of Procedures. (vi) The scheme shall not be available for the following export products: a) All items covered under Chapter-1 to 24 and Chapter-71of ITC(HS) Classification; b) Biotechnology items and related products; and c) SCOMET items. (vii) The scheme shall not be available for the following inputs: A. All vegetable / edible oils classified under Chapter-15 and all types of oilseeds classified under Chapter-12 of ITC (HS)book; B. All types of cereals classified under Chapter 10 of ITC (HS) book; C. Horn, hoof and any other organ of animal; D. Wild animal products, organs and waste thereof; E. Honey; F. All items with basic customs duty of 30% or more; G. All types of fruits/ nuts/ vegetables classified under Chapter-7 and Chapter-8 of ITC (HS) book; H. Items covered under heading 2515, 2516, 3301, 3302, 3303 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lder, manufacturer and Chartered Engineer in terms of Foreign Trade Development and Regulation Act 1992 and/or Customs Act 1962, as amended and rules made there under. (xiii) In cases where Chartered Engineer has not exercised due diligence or has willfully become party to misdeclaration action will be initiated under against such person under FT(D R) Act 1992, as amended and rules made there under. In addition, such cases shall also be referred to The Institute of Engineers India for taking action as warranted under the bylaws of the institute. (xiv) All the provisions applicable for Advance Authorisation Scheme shall be applicable to this scheme also in so far they are not inconsistent with this scheme. 4.07 Advance Authorisation for Annual Requirement and Eligibility Condition (i) Advance Authorisation for Annual Requirement shall only be issued for items notified in Standard Input Output Norms (SION). And it shall not be available in case of adhoc norms under paragraph 4.03 (b) (ii) of FTP. (ii) Advance Authorisation for Annual Requirement shall also not be available in respect of SION where any item of input appears in Appendix 4-J. (iii) Exporters having past export performan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ority under paragraph 4.07 of Handbook of Procedures and applicants shall be required to apply under paragraph 4.06 of Hand Book of Procedures to the Norms Committee. (c) Where export and/or import of biotechnology items and related products are involved, Authorisation under paragraph 4.07 of Handbook of Procedures shall be issued by Regional Authority only on submission of a No Objection Certificate from Department of Biotechnology. 4.12 Accounting of Input (i) Wherever SION permits use of either (a) a generic input or (b) alternative input, unless the name of the specific input together with quantity [which has been used in manufacturing the export product] gets indicated / endorsed in the relevant shipping bill and these inputs, so endorsed, within quantity specified and match the description in the relevant bill of entry, the concerned Authorisation will not be redeemed. In other words, the name/description of the input used (or to be used) in the Authorisation must match exactly with the name/description endorsed in the shipping bill. (ii) In addition, if in any SION, a single quantity has been indicated against a number of inputs (more than one input), then quantities of such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ition sheet of the Advance Authorisation. 4.16 Actual User Condition for Advance Authorisation i. Advance Authorisation and / or material imported under Advance Authorisation shall be subject to Actual User condition. The same shall not be transferable even after completion of export obligation. However, Authorisation holder will have option to dispose of product manufactured out of duty free input once export obligation is completed. ii. In case where CENVAT/input tax credit facility on input has been availed for the exported goods, even after completion of export obligation, the goods imported against such Advance Authorisation shall be utilized only in the manufacture of dutiable goods whether within the same factory or outside (by a supporting manufacturer). For this, the Authorisation holder shall produce a certificate from Chartered Accountant at the time of filing application for Export Obligation Discharge Certificate to Regional Authority concerned. An AEO having valid certificate has the option to produce self declaration to this effect. iii. Waste / Scrap arising out of manufacturing process, as allowed, can be disposed off on payment of applicable duty even before fulfi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed without compliance to the mandatory QCOs, shall not be transferred to DTA, even after regularisation of default in fulfilment of export obligation. For the purpose of this para, unutilised imports means imported inputs (without compliance of mandatory QCOs) which have not been accounted for, as per SION/Ad-hoc Norms, in the product exported under the same authorisation. (iv) The unutilised imports shall be regularised as follows: (a) The unutilised material shall be destroyed in the presence of jurisdictional GST/Customs authorities who shall certify the destruction of the goods or same may be re-exported; and in addition (b) The AA holder shall pay duties/taxes/cesses exempted along with interest on the unutilsed exempted material to Customs Authorities plus composition fee of an amount equivalent to 10% of the CIF value of unutilized imported inputs to DGFT. Proof thereof shall be submitted to the RA concerned before grant of EODC. (v) The exemption from QCO will be available for physical exports only and such exemption will not be allowed for deemed exports for Advance Authorisation Holders. (vi) The facility of clubbing under para 4.36 of Handbook of Procedures (HBP). 2023 s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... obligation even if payment is realised in Indian Rupees. iv. Authorisation holder needs to file Bill of Export for export to SEZ unit/ developer / co-developer in accordance with the procedures given in SEZ Rules, 2006. 4.22 Export Obligation Period and its Extension Period for fulfillment of export obligation and its extension under Advance Authorisation shall be as prescribed in Handbook of Procedures. 4.23 Re-import of exported goods under Duty Exemption/ Remission Scheme Goods exported under Advance Authorisation/ Duty Free Import Authorisation may be re-imported in same or substantially same form subject to such conditions as may be specified by Department of Revenue. Authorisation holder shall also inform about such re- importation to the Regional Authority which had issued the Authorisation within one month from date of re-import. DUTY FREE IMPORT AUTHORISATION SCHEME (DFIA) 4.24 DFIA Scheme (a) Duty Free Import Authorisation is issued to allow duty free import of inputs. In addition, import of oil and catalyst which is consumed/ utilised in the process of production of export product, may also be allowed. (b) Provisions of paragraphs 4.12, 4.18, 4.20, 4.21 and 4.23 of FTP ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t product] should be indicated / endorsed in the relevant Shipping Bill/ Bill of Export / Tax invoice for supply prescribed under GST rules. Only such inputs may be permitted for import in the authorisation in proportion to the quantity of these inputs actually used/consumed in production, within overall quantity against such generic input/alternative input. (v) In addition, if in any SION, a single quantity has been indicated against a number of inputs (more than one input), then quantities of such inputs to be permitted for import shall be in proportion to the quantity of these inputs actually used/consumed in production and declared in Shipping Bill / Bill of Export / Tax invoice for supply prescribed under GST rules within overall quantity against such group of inputs. Proportion of these inputs actually used/consumed in production of export product shall be clearly indicated in Shipping Bill / Bill of Export / Tax invoice for supply prescribed under GST rules. (vi) Separate DFIA shall be issued for each SION. (vii) Exports under DFIA shall be made from any port listed in Para 4.35 of Handbook of Procedures. However, separate application shall be made for EDI and non-EDI ports. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gold of 3 carats and above up to a maximum limit of 22 carats. (ii) Silver jewellery including partly processed jewellery, silverware, silver strips and articles including medallions and coins (excluding legal tender coins and any engineering goods) containing more than 50% silver by weight; (iii) Platinum jewellery including partly processed jewellery and articles including medallions and coins (excluding legal tender coins and any engineering goods) containing more than 50% platinum by weight. 4.32 Schemes The schemes are as follows: (i) Advance Procurement/ Replenishment of Precious Metals from Nominated Agencies; (ii) Replenishment Authorisation for Gems; (iii) Replenishment Authorisation for Consumables; (iv) Advance Authorisation for Precious Metals. 4.33 Advance Procurement/ Replenishment of Precious Metals from Nominated Agencies (i) Exporter of gold / silver / platinum jewellery and articles thereof including mountings and findings may obtain gold/ silver / platinum as an input for export product from Nominated Agency, in advance or as replenishment after export in accordance with the procedure specified in this behalf. Replenishment of gold/silver/platinum will be subjec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ss than 0.995 and mountings, sockets, frames and findings of 8 carats and above; (ii) Silver of fineness not less than 0.995 and mountings, sockets, frames and findings containing more than 50% silver by weight; (iii) Platinum of fineness not less than 0.900 and mountings, sockets, frames and findings containing more than 50% platinum by weight. (b) Advance Authorisation shall carry an export obligation which shall be fulfilled as per procedure indicated in Chapter 4 of Handbook of Procedures. (c) Value Addition shall be as per paragraph 4.37 of FTP and 4.60 of Handbook of Procedures. (d) Advance Authorisation Scheme is not available where the item of export is Gold Medallions and Coins or Gold jewellery/articles manufactured by fully mechanized process . 4.37 Value Addition Minimum Value Addition norms for gems and jewellery sector are given in paragraph 4.60 of Handbook of Procedures. It would be calculated as under: A B B VA = x100, 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 gems ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Cut Polished Diamonds with Re-import Facility at Zero Duty An exporter (with annual export turnover of Rs 5 crores for each of the last three years) or the authorized offices/ agencies in India of laboratories mentioned under paragraph 4.73 of Hand Book of Procedures may export cut polished diamonds (each of 0.25 carat or above) to any of the agencies/laboratories mentioned under paragraph 4.73 of Handbook of Procedures with re-import facility at zero duty within 3 months from the date of export. Such facility of re- import at zero duty will be subject to guidelines issued by Central Board of Customs Excise, Department of Revenue. 4.44 Export against Supply by Foreign Buyer (i) Where export orders are placed on nominated agencies / status holder / exporters of three years standing having an annual average turnover of Rupees five crores during preceding three financial 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. (ii) Such supplies can also be in advance and may involve semi- finished jewellery including findings / mountings / components for repairs / re-m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd and coloured gemstones studded jewellery / plain gold jewellery and having an average annual turnover of Rs. 3 crore or above during preceding three licensing years may also carry out their business through designated Diamond Dollar Accounts(DDA). (b) 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) Purchase of cut and polished diamonds, coloured gemstones and plain gold jewellery from local sources; (iii) Import / purchase of gold from overseas / nominated agencies and repayment of dollar loans from the bank; and (iv) Transfer to Rupee Account of exporter. Details of this DDA Scheme are given in Handbook of Procedures. (c) A non DDA holder is also permitted to supply cut and polished diamonds to DDA holder, receive payment in dollars and convert the same into Rupees within 7 days. Cut and polished diamonds and coloured gemstones so supplied by non-DDA holder will also be counted towards discharge of his export obligation and/ or entitle him to replenishment Authorisation. 4.51 Export of cut polished precious and semi-precious stones for treatment and r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing as may be prescribed, on the per item/total overall benefit amount permissible, within the overall budget/ outlay finalized, will be decided and notified by the Department of Commerce (DoC) in consultation with Department of Revenue. vii. 3 [ Under the Scheme, a rebate would be granted to eligible exporters at a notified rate as a percentage of FOB value with a value cap per unit of the exported product, wherever required, on export of items which are categorized under the notified 8 digit HS Code. However, for certain export items, a fixed quantum of rebate amount per unit may also be notified. Rates of rebate / value cap per unit under RoDTEP will be notified in Appendix 4R and Appendix 4RE [for exports of products manufactured by Advance Authorisation holders (except Deemed Exports), EOU and SEZ units]. In addition to necessary changes which may be brought in view of budget control measures as mentioned above, efforts would be made to review the RoDTEP rates on an annual basis and to notify them well in advance before the beginning of a financial year. ] viii. The rebate allowed is subject to the receipt of sale proceeds within time allowed under the Foreign Exchange Managem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act, 1962 (52 of 1962). 5 [****] xiii. Products manufactured or exported availing the benefit of the Notification No. 32/1997-Customs dated 1st April, 1997. xiv. Exports for which electronic documentation in ICEGATE EDI has not been generated/ Exports from non-EDI ports. xv. Goods which have been taken into use after manufacture. 4.55 A Government, however, reserves the right to modify any of the categories as mentioned above for inclusion or exclusion under the scope of RoDTEP, at a later date. 4.55 B Inclusion of exports made by categories mentioned in para 4.55 (x), (xi) and (xii) above and RoDTEP rates for export items under such categories would be decided based on the recommendations of the RoDTEP Committee. 4.56 Nature of Rebate The e-scrips would be used only for payment of duty of Customs leviable under the First Schedule to the Customs Tariff Act, 1975 viz. Basic Customs Duty. 4.57 Monitoring, Audit and Risk Management System: For the purposes of audit and verification, the exporter would be required to keep records substantiating claims made under the Scheme. A monitoring and audit mechanism with an IT based Risk Management System (RMS) would be put in place by the CBIC, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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