Exim Policy


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Exim Policy

  1. 1. Duty Exemption Remission Schemes-Policy <ul><li>Duty Exemption Schemes enable duty free imports of inputs required for export production. </li></ul><ul><li>Duty exemption schemes consist of </li></ul><ul><li>Advance Authorization. </li></ul><ul><li>Duty Free Import Authorization (DFIA) </li></ul><ul><li>B. Duty Remission Scheme </li></ul><ul><li>Enables post export replenishment/ remission of duty on inputs used in export product. </li></ul><ul><li>Duty Remission Scheme consist of </li></ul><ul><li>Duty Entitlement Pass Book Scheme (DEPB), and </li></ul><ul><li>Duty Drawback Scheme </li></ul>
  2. 2. <ul><li>Re-import of exported goods under Duty Exemption/Remission Scheme. </li></ul><ul><li>Goods exported under Advance Authorization/ DFIA/ DEPB may be re-imported in same or substantially same form subject to Department of Revenue specified conditions. </li></ul><ul><li> Value Addition </li></ul><ul><li>V.A. = { (A-B)/ B } x 100 </li></ul><ul><li>A= F.O.B. value of the export realized / FOR value of the supply received </li></ul><ul><li>B= CIF value of inputs/ imports. </li></ul>
  3. 3. Advance Authorization Scheme <ul><li>Issued to allow duty free import of inputs, which are physically incorporated in in export product, making normal allowance of wastage. </li></ul><ul><li>In addition, fuel, oil, energy, catalysts which are consumed /utilized to obtain export product are also allowed. </li></ul><ul><li>Duty free import of mandatory spares up to 10% of CIF value of Authorization which are required to be exported/ supplied with resultant product, are also allowed. </li></ul><ul><li>Advance Authorizations are issued for inputs and export items given under Standard Input Output Norms (SION). </li></ul>
  4. 4. <ul><li>Can also be issued on the basis of ad-hoc norms or self-declared norms. </li></ul><ul><li>Advance Authorization is issued either to a manufacturer exporter or a merchant exporter tied to a supporting manufacturer for </li></ul><ul><li>Physical exports including exports to SEZ and/or </li></ul><ul><li>Intermediate supplies </li></ul><ul><li>Supply of ‘stores’ on board of foreign going vessels. </li></ul>
  5. 5. <ul><li>Advance Authorizations are exempted from payment of basic custom duty, additional cusom tduty, education cess, anti dumping duty, if any. </li></ul><ul><li>Advance Authorization and/or materials imported there under will be with actual user condition. </li></ul><ul><li>Advance Authorization necessitates exports with positive value addition. </li></ul><ul><li>Exports to SEZ irrespective of currency of realization would also be covered. </li></ul><ul><li>In case of imports of tea, minimum value addition under advance authorization shall be 100%. </li></ul>
  6. 6. <ul><li>Advance Authorization can also be issued for annual requirements. </li></ul><ul><li>Status Certificate Holders shall be entitled for Advance Authorization for annual requirements. </li></ul><ul><li>Entitlement in terms of CIF value of imports shall be up to 300% of the FOB value of physical exports or FOR value of deemed exports in preceding licensing year or Rs 1 crore whichever is higher. </li></ul><ul><li>In case of Advance Authorization, drawback will be available for any duty paid material, whether imported or indigenous used in goods exported, as per the drawback rates fixed by Department of Revenue. </li></ul>
  7. 7. Advance Authorization for applicants with multiple units <ul><li>Transfer of any duty free material imported or procured against Advance Authorization from one unit of company to another for manufacturing purpose shall be done with prior intimation to jurisdictional Excise Authorities with a clear understanding that no benefit of CENVAT shall be claimed on such transferred inputs. </li></ul><ul><li>However, to avail facility all units should be mentioned in IEC certificate. </li></ul>
  8. 8. <ul><li> Self declared authorization where SION does not exist </li></ul><ul><li>RA may issue Advance Authorizations where SION are not fixed, based on self declaration and an undertaking by applicant for final adjustment as per ad-hoc norms fixed by the authorities. </li></ul><ul><li>However, imports of vegetables/ edible oils, cereals, spices, honey etc will not be permitted. </li></ul><ul><li>Entitlement will be maximum of 500% of FOB value and/or FOR value of preceding years exports or supplies in case of status holders , and Rs 5 crore or 500% of FOB value/FOR value of exports/ supply, whichever is more, for others. </li></ul>
  9. 9. <ul><li>Applicant will be required to give an undertaking that he shall abide by the norms fixed by Norms Committee and accordingly pay duty, together with the interest, on unutilized inputs as per norms fixed by NC. </li></ul><ul><li> Description of an Advance Authorization </li></ul><ul><li>An Advance Authorization shall specify </li></ul><ul><li>Names and description of items to be imported and exported/ supplied. </li></ul><ul><li>Quantity of each item to be imported or wherever quantity cannot be indicated, value of the same will be indicated. </li></ul>
  10. 10. <ul><li>(c) However, if in case of SION, quantity and value of individual inputs is a limiting factor, same will be indicated. </li></ul><ul><li>(d) Aggregate CIF value of imports, and </li></ul><ul><li>(e) FOB/FOR value and quantity of exports/ supplies. </li></ul><ul><li>Exports/ supplies made in anticipation of grant of Advance Authorization will be entirely at the risk and responsibility of exporter. </li></ul><ul><li>Conversion of duty free shipping bills to drawback shipping bills may be permitted by custom authorities in case the application for an Advance Authorization is rejected or modified by Regional Authority. </li></ul>
  11. 11. <ul><li> Export Obligation Period and its Extension </li></ul><ul><li>Fulfillment Period of EO under an Advance Authorization shall commence from Authorization issue date. </li></ul><ul><li>EO shall be fulfilled within 24 months except in case of projects/turnkey projects. </li></ul><ul><li>Request for extension can be permitted by RA only one for a period of six months, with a payment of 2% duty saved on all unutilized imported items. </li></ul>
  12. 12. Duty Entitlement Pass Book Scheme (DEPB) <ul><li>Objective is to neutralize the incidence of customs duty on import content of export product. </li></ul><ul><li>Components of Special Additional Duty and custom duty on fuel shall also be allowed under DEPB. </li></ul><ul><li>This will be factored in DEPB in case of non-availment of CENVAT credit. </li></ul><ul><li>An exporter can apply for credit, at a specified percentage of FOB value of exports, made in freely convertible currency or payment made from foreign currency accounts of SEZ in case of a supply by DTA. </li></ul>
  13. 13. <ul><li>Credit will be available against export products and at rates that are specified by DGFT by way of public notice. </li></ul><ul><li>Credit is utilized for payment of Customs Duty on freely importable items. </li></ul><ul><li>DEPB scrips will also be utilized for payment of duty against imports under EPCG scheme w.e.f. 1.1.2009. </li></ul><ul><li>DEPB holder shall have the option to pay additional customs duty in cash. </li></ul><ul><li>DEPB and/or items imported against it are freely transferable . </li></ul>
  14. 14. <ul><li>Transfer of DEPB shall be for import at a specified port, which will be the port from where the exports have been made. </li></ul><ul><li>However, imports from a port other than the port of export will be allowed under TRA facility. </li></ul><ul><li>Additional Custom duty/ Excise Duty and Special Additional Duty paid in cash or through debit under DEPB can be adjusted as Duty Drawback as per DoR rules. </li></ul>
  15. 15. <ul><li>All applications regarding the fixation of DEPB rates through concerned EPCs which will verify the FOB value of exports as well as the international prices of inputs covered under SION. </li></ul><ul><li>Application for the grant of credit under DEPB is made to RA concerned . </li></ul><ul><li>Agency commission is allowed for DEPB entitlement up to 12.5% of FOB value. </li></ul><ul><li>FOB value in free foreign exchange will be converted into Indian Rupees as per exchange rate for exports as applicable on the date of order of “Let Export” by the customs. </li></ul>
  16. 16. <ul><li>Application for obtaining credit shall be filed within a period of twelve months from the date of exports or the date of linking up EDI shipping bill details in the DGFT website, or within six months from the date of realization, or within three months from the release of shipping bill, whichever is later , in respect of shipments for which the claim has been filed. </li></ul><ul><li>All shipping bills in any one application must relate to exports made from one custom house. </li></ul><ul><li>There is no limit on number of shipping bills which can be filed through EDI mode in single application. </li></ul>
  17. 17. Duty Free Import Authorization Scheme (DFIA) <ul><li>DFIA is issued to allow duty free imports of inputs, fuel, oil, catalysts which are required for production of export products. </li></ul><ul><li>DGFT reserves the right to exclude any product from the purview of DFIA. </li></ul><ul><li>These authorizations are issued only for products for which SION have been notified. </li></ul><ul><li>Pre-export authorization shall be issued with actual user condition and shall be exempted from payment of basic customs duty, additional customs duty/excise duty, anti-dumping duty etc. </li></ul>
  18. 18. <ul><li>A minimum 20% value addition will be required for issuance of such authorization except for items in gems and jewellery sector. </li></ul><ul><li>Request of transferability of authorization or inputs imported can be made before concerned Regional Authority once the export obligation is fulfilled. </li></ul><ul><li>Once transferability is endorsed, authorization holder can transfer DFIA or duty free inputs except fuel. </li></ul>
  19. 19. Schemes for Gold/Silver/ Platinum Jewellery <ul><li>Following items, if exported would be eligible for facilities. </li></ul><ul><li>Gold jewellery, including partly processed jewellery and articles including medallions and coins (excluding legal tender coins), whether plain or studded, containing gold of 8 carats and above. </li></ul><ul><li>Silver jewellery including partly processed jewellery, silverware, silver strips and articles including medallions and coins (excluding legal tender coins) containing more than 50% silver by weight. </li></ul>
  20. 20. <ul><li>(c) Platinum jewellery including partly processed jewellery and articles including medallions and coins (excluding legal tender coins and engineering goods) containing more than 50% platinum by weight. </li></ul><ul><li> Value Addition </li></ul><ul><li>Value addition for gems and jewellery shall be calculated as under: </li></ul><ul><li>V.A.= { (A-B)/B }x 100 </li></ul><ul><li>A= FOB value of export realized/FOR value of supply received. </li></ul>
  21. 21. <ul><li>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. </li></ul><ul><li>(a) Wherever gold has been obtained on loan basis, value will also include interest paid in free foreign exchange to foreigner supplier. </li></ul>
  22. 22. Export Promotion Capital Goods Scheme <ul><li>EPCG scheme allows import of capital goods including CKD/SKD as well as computer software at 3% custom duty. </li></ul><ul><li>The above is subject to an export obligation equivalent to 8 times of duty saved on capital goods imported under EPCG scheme, to be fulfilled in 8 years reckoned from Authorization the date of issue of EPCG licence. </li></ul>
  23. 23. <ul><li>In case of agro-units, and units in cottage or tiny sector, import of capital goods at 3% Customs Duty shall be allowed subject to fulfillment of export obligations equivalent to 6 times the duty saved on capital goods imported, in 12 years from the date of issue of licence. </li></ul><ul><li>In case of SSI units, import of capital goods at 3% customs duty shall be allowed, subject to fulfillment of export obligation equivalent to 6 times of duty saved on capital goods, in 8 years from the authorization date. </li></ul>
  24. 24. <ul><li>Provided the landed CIF value of imported capital goods does not exceed Rs 50 lakhs and the total investment in plant and machinery after such imports does not exceed SSI limit. </li></ul><ul><li>In those casers, where the duty saved exceeds Rs 100 crores or more the export obligation shall be fulfilled in 12 years. </li></ul><ul><li>Capital goods also will included spares, tools, jigs, fixtures, and moulds. </li></ul><ul><li>Second hand capital goods, wihout any restriction on age may also be imported under EPCG scheme. </li></ul>
  25. 25. <ul><li>Import of cars, sports utility vehicles/ all purpose vehicles shall be allowed only to travel agents, tour operators or tour transport operators, and companies owning/ operating golf resorts. </li></ul><ul><li>The conditions are: </li></ul><ul><li>Total foreign exchange earned by hotels, travel & tourism and golf tourism sectors in current and preceding three licensing years is Rs 1.5 crores or more. </li></ul>
  26. 26. <ul><li>(b) ‘Duty saved’ amount on all EPCG licenses issued in a licensing year for imports of cars, SUVs/ all purpose vehicles shall not exceed 50% of average foreign exchange earned in preceding three licensing years. </li></ul><ul><li>(c) Vehicles imported shall be registered for the tourist purpose only. </li></ul><ul><li>Import of capital goods shall be subject to actual user condition. </li></ul><ul><li>Export obligation shall be fulfilled by export of goods manufactured/ service rendered by the applicant. </li></ul><ul><li>Up to 50% export obligation may also be fulfilled by export of other goods manufactured/ services provided by the same company. </li></ul>
  27. 27. <ul><li>Shipments under Advance Authorization, DFIA, DEPB, Drawback scheme would also be counted for fulfillment of export obligation. </li></ul><ul><li>Export obligation can also be fulfilled by supply of items to DTA, provided realization is in free foreign exchange. </li></ul><ul><li>Export shall be physical exports. GHowever, deemed exports shall also be counted towards fulfillment of export obligation. </li></ul><ul><li>EPCG authorization holder may source capital goods from a domestic leasing company. </li></ul>