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TMI BlogIntroduction of the New Scheme: "Diamond Imprest Authorization"under Chapter 4 of the Foreign Trade Policy 2023-24 (FTP 2023-24)X X X X Extracts X X X X X X X X Extracts X X X X ..... Introduction of the New Scheme: "Diamond Imprest Authorization"under Chapter 4 of the Foreign Trade Policy 2023-24 (FTP 2023-24) X X X X Extracts X X X X X X X X Extracts X X X X ..... hing, and processing. The diamonds that are imported under this scheme are meant to be processed and then exported after the value addition (cutting and polishing). The scheme is expected to boost India's status as a global hub for diamond processing and significantly improve the ease of doing business in this sector. Key Features of the Diamond Imprest Authorization Scheme * Duty-Free Import: The Diamond Imprest Authorization (DIA) allows for the duty-free import of rough diamonds. This is a significant advantage for diamond processors, as it reduces the overall cost of importing rough diamonds for processing. * Export Obligation: The rough diamonds that are imported under the DIA scheme must be cut and polished before being expor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted. This ensures that the diamonds undergo value addition within India, and the final product (polished diamonds) is exported. The export obligation ensures that the processed diamonds are exported, contributing to India's trade balance and enhancing foreign exchange earnings. * Short-Term Import of Diamonds: The authorization allows for the short-term import of rough diamonds intended for processing. These diamonds are required to be exported within a certain period (often within a year, as per specific policy guidelines). * Eligibility Criteria: Exporters in the diamond processing industry, including manufacturers, traders, and exporters of cut and polished diamonds, are eligible to apply for the DIA. The applicants must demonstr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate their capacity to process rough diamonds and export the finished product. * Authorization and Validity: The Diamond Imprest Authorization is typically valid for a certain duration, and it needs to be renewed or extended in accordance with the terms specified by the Directorate General of Foreign Trade (DGFT). The authorization is issued by the DGFT based on the fulfilment of eligibility criteria, and it is subject to regular audits and monitoring to ensure compliance with the policy. * Flexibility in Import/Export: The DIA scheme provides flexibility in the import-export process, allowing businesses to import rough diamonds based on demand, process them, and then export the final product without facing the constraints of high duties ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or restrictions. * Compliance Requirements: * The DIA scheme requires the importers to adhere to all regulatory requirements, including maintaining records, adhering to export obligations, and fulfilling other compliance measures as mandated by the DGFT and Customs. * Failure to comply with export obligations could result in penalties or revocation of the authorization. * Monitoring and Audit: Regular monitoring and audit mechanisms will be in place to ensure that the rough diamonds imported under the DIA scheme are properly processed and exported within the prescribed time frame. This is to avoid misuse of the scheme and ensure the diamonds are processed as intended. Benefits of the Diamond Imprest Authorization Scheme * Enhanc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed Competitiveness: By facilitating duty-free imports of rough diamonds, India's diamond processing sector can remain competitive on a global scale, enhancing the industry's position as a leader in the diamond polishing and export market. * Value Addition: The DIA scheme will encourage value addition within India, as the imported rough diamonds will be processed into cut and polished diamonds for export. This not only enhances India's export profile but also increases employment and skill development within the country. * Boost to Exports: The requirement of exporting processed diamonds ensures that the country benefits from foreign exchange earnings, contributing to the overall growth of India's diamond export market. * Ease of Doing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Business: By offering a clearer framework for diamond import/export, the scheme reduces procedural delays and provides greater flexibility to diamond traders and processors. * Strengthening India's Global Position: India has long been a global hub for diamond processing. The Diamond Imprest Authorization scheme strengthens this position, making India a key player in the global diamond supply chain. How to Apply for the Diamond Imprest Authorization * Eligibility: An exporter with a Two Star Export House status or above, having achieved a minimum export performance of USD 15 Million in Cut & Polished Diamonds each year for the past Three Financial Years and filled all GST & Income Tax Returns for those year may be granted a DIA. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is authorization allows the import of Natural Cut & Polished Diamonds up to 5% of the average annual export performance of Cut & Polished Diamonds over the prevision three financial years' subject to a maximum value of USD 15 million. The DIA Authorization does not apply to Lab-Grown Diamonds (LGDs). * Application Process: * Applicants must submit a request in ANF 4J for the DIA through the DGFT's online system or relevant regional authority. * The application should include: * Details of the applicant's business and their capacity to process rough diamonds. * Information on how they intend to export the polished diamonds. * Compliance history with previous export obligations. * Issuance of Authorization: Once the appl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ication is reviewed and approved, the DGFT will issue the Diamond Imprest Authorization, allowing the applicant to import rough diamonds duty-free for processing and export. * Export Monitoring: The applicant must adhere to export obligations, and failure to do so may result in penalties or the cancellation of the authorization. Introduction of new ANF 4J, new para 4.60, 4.61, 4.62, 4.63, 4.64 and new paras 4.96, 4.97, 4.98 in Chapter 4 of Handbook of Procedures, 2023 vide DGFT Notification No. 53/2024-2025 dtd 21-01-2025 & Public Notice 42/2024-25 dtd. 21-01-2025. Key information: * Import under DIA are exempted from Basic Custom Duty, Additional Customs Duty, Education Cess, Anti-Dumping Duty, Countervailing Duty, Safeguard Duty, TP ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... S Safeguard Duty, IGST and Compensation Cess under sub section 7 and sub section 9 respectively of the section 3 of the Customs Tariff Act, 1975. * Imports and Exports shall be permitted only through Mumbai Airport. * DIA and Imported Diamond is subject to Actual User Condition. The import is subject to pre-import condition. * The Export Obligation shall be fulfilled exclusively through physical export of Natural Cut and Polish Diamonds, with each diamond weighing no more than ¼ of a Carat (25 Cents). One to One Correlation between import and export shall not be required. * The holder of DIA must achieve a minimum Value Addition (VA) of 10% by realizing in Freely Convertible Currency (FCC). On this scheme, provision of Para ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2.52 of FTP 2023 shall not be applicable. * Deemed Export are not allowed under this scheme. * The DIA Holder is required to execute a Bond equal to the Export Obligation of DIA along with a performance Band Guarantee of an amount equivalent to the duty foregone, with the Jurisdictional Customs Department/Authority. * Pre-Import Condition need to be adhered with to avail the benefits of the Scheme. Only those exports which are made after the date of import, may be accepted towards discharge of export obligation. Shipping Bill must bear the Scheme Code as per Customs Notification and DIA number need to be endorsed to establish co-relation of export with DIA issued. * DIA shall be valid for 12 months for Import and for Export Obligati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on Period shall be 18 months from the date of issuance of Authorization. The Export obligation against each import consignment shall be fulfilled with in a period of Six (6) months from the date of clearance of such consignment through Customs. * Only one authorization is allowed for one IEC for a particular Financial year. No ARO/Invalidation letter/Certificate of Supply (cos) is allowed against DIA. * DIA holder can use imported material either in its any unit as per para 4.10 of HBP or if jobber/supporting manufacturer are endorsed on DIA by Regional Authority, then they can use the imported material. However, the facility of Co-licensee is not available for the DIA. * No extension of Export Obligation Period and No revalidation wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll be allowed against DIA. * DIA Holder shall submit an Online Application in ANF 4K to RA concerned, as specified in Appendix 4A along with prescribed documents in support of fulfilment of EO (Export Obligation). * Case of bonafide default in fulfilment of Export Obligation may be regularized by RA on payment of applicable Customs duty and interest online through ICEGATE Payment Gateway. DIA Holder shall also pay an amount equivalent to 1% of the shortfall of FOB value in India Rupee, online through DGFT website into major Head of Account 1453, Foreign Trade and Export promotion & Minor Head 102. Conclusion * The Diamond Imprest Authorization (DIA) scheme introduced under the Foreign Trade Policy 2023-24 aims to boost India's diamon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d processing and export industry by facilitating the duty-free import of rough diamonds for processing and ensuring their subsequent export as polished diamonds. This initiative helps increase value addition within India, enhances global competitiveness, and promotes economic growth in the diamond sector.
* By simplifying import/export processes, reducing duties, and encouraging compliance with export obligations, the DIA scheme is a significant step in enhancing India's role in the global diamond market. X X X X Extracts X X X X X X X X Extracts X X X X
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