New modalities for registration of contracts for cotton exports by DGFT

Department of Commerce vide Notification No.12 dated 16/12/2010 stipulated that export contracts for cotton would be registered with DGFT.

DGFT has issued Policy Circular on 29/12/2010 stipulating modalities and conditions for registration of export contract by DGFT office, and uploaded the Circular on www.dgft.gov.in.

The salient features of modalities are:

a.      The Calendar of Events showing the stipulated dates has also been put on the DGFT website along with Policy Circular.

b.      In order to avoid human interface, applications will be obtained on-line only at designated e-mail address i.e. cottonexport@nic.in (from 1200 hours on 31/12/2010 to 1700 hours on 6/1/2011).

c.      The format for application to be sent by e-mail has been prescribed and displayed at the DGFT website along with the Policy Circular.

d.      Based on scrutiny of applications received, the available quantity of cotton for export will be allocated on pro-rata basis. 

e.      There will be a ceiling of 1 lakh bales per IEC and a floor of 500 bales per IEC for registration of contracts.

f.        Exporters who had obtained registration of export contracts in the month of October, 2010, but did not export the full quantity will be dis-incentivised, by reducing their pro-rata allocation to the extent of default in exports. 

g.      For ease of comprehension by trade, an illustrative example of the method of allocation has been given on the DGFT website along with the Policy Circular.

h.      After allocation, the applicant will be given 15 days time to deposit export contracts, confirmed irrevocable Letter of Credit (LC) or Foreign Inward Remittance Certificate (FIRC) from the bank showing a minimum of 25% Advance Payment and balance Cash Against Delivery (CAD) or 100% Advance Payment, along with other prescribed documents.

i.         Those applicants who furnish stipulated documents within the time limit will be grantedRegistration Certificates.  Atleast 30 days time will be availabe for export against Registration Certificate.

j.         If an applicant fails to submit documents in time, he will be declared ineligible and he will forfeit his right to future allocations.

k.      Those exporters who fail to export the registered quantity within the stipulated period, (the last date is 25/2/2011), will be debarred from future allocations. In addition, penal action will be initiated against them under the Foreign Trade (Development & Regulation) Act.