Guidelines for sale of 25% of the production in the Domestic Tariff Area under Open General Licence by the units approved under 100% Export Oriented Unit Scheme and Units approved in the Export Processing Zones/Free Trade Zones - Customs - F. No. 305/31/88 FTT

Guidelines for sale of 25% of the production in the Domestic Tariff Area under Open General Licence by the units approved under 100% Export Oriented Unit Scheme and Units approved in the Export Processing Zones/Free Trade Zones F. No. 305/31/88 FTT Dated 30-5-1988 Government of India Ministry of Finance (Department of Revenue) New Delhi Subject : Guidelines for sale of 25% of the production in the Domestic Tariff Area under Open General Licence by the units approved under 100% Export Oriented Unit Scheme and Units approved in the Export Processing Zones/Free Trade Zones. The Chief Controller of Imports and Exports, Ministry of Commerce, have since issued fresh guidelines for sale of 25% of production in the Domestic Tariff Area under Open General License by the units approved under 100% Export Oriented Undertaking Scheme, and units approved in the Export Processing Zones/Free Trade Zones. A copy of their REP Circular No. 17/88 (F. No. 3/11/88-EPC), dated 2nd May, 1988 is enclosed for ready reference. 2. You are requested to ensure that the guidelines and procedure set out in the above said circular are scrupulously followed. No. 3/11/88-EPC GOVERNMENT OF INDIA MINISTRY OF COMMERCE OFFICE OF THE CHIEF CONTROLLER OF IMPORTS AND EXPORTS UDYOG BHAWAN : NEW DELHI . Rep. Circular No. 17/88, dated the 2nd May, 1988. To, 1. Federation of Indian Export Organisations, PHD House, 3rd Floor, 4/2, Siri Institutional Area, Hauz Khas, New Delhi-16 2. All Export Promotion Councils/Commodity Boards. 3. All the Licensing Authorities/E. P. Os. 4. All Collectors of Customs. 5. All Collectors of Central Excise 6. Development Commissioner, Export Processing Zones/Free Trade Zones. 7. All units approved under the 100% Export Oriented Unit Scheme and Units in the Export Processing Zones. Subject : Guidelines for sale of 25% of the production in the Domestic Tariff Area under Open General Licence by the units approved under 100% Export Oriented Unit Scheme and units approved in the Export Processing Zones/Free Trade Zones . Sir, Attention is invited to para 332 of Chapter-XXII and para 342(3) of Chapter -XXIII of the Import Policy for Registered Exporters in the Export Processing Zones/Free Trade Zones and under 100% Export Oriented Units Scheme respectively of the Import Export Policy for 1988-91 (Vol. I) which, inter alia, provides for sale of goods into the domestic tariff area upto 25% of the production by the units approved under the 100% Export Oriented Unit Scheme and the Export Processing Zones/Free Trade Zones subject to payment of appropriate customs and other duties as notified by the Deptt. of Revenue, Ministry of Finance, New Delhi. 2. The following detailed guidelines and procedures are set out for availing of the facility mentioned in the paragraph above : (a) The sale will be allowed in relation to the ex-factory value of the total production excluding permissible rejects and is governed by OGL licence No. 21/88, Order No. 21/88-91 dated 30th March, 1988 and OGL No. 24/88, Order No. 24/88-91 dated the 30th March, 1988. (b) The manufactured items listed below will not however be allowed for sale : (i) Jewellery all types; (ii) Diamonds, precious and semi-precious stones, jewels; (iii) Motor Cars; (iv) Recorded Video and Audio Cassettes; and (v) Silver Bullion. (c) Government may, from time to time, modify the list of items of manufacture which will not be allowed for sale. (d) The sale will be available upto the extent of 25% of the total production provided that the total value of the indigenous constituents of the final item of manufacture in terms of raw materials, consumables and components is in excess of 30% of the total cost of all constitutents, imported and indigenous, but excluding, inputs such as water, power and services. The facility will be restricted to 15% of the total production where the value of indigenous constituents of the item of manufacture so computed is less than 30% of the total or where Government consider that there is insufficient integration in manufacture. (e) Sale into domestic tariff area of the items (excluding rejects) will be allowed on a quarterly, half yearly or annual basis in accordance with an option that may be exercised by the party year is subject to the condition that the quantity in terms of ex-factory value excluding the level of rejects approved by the Board of Approvals, during the relevant period has already been exported as required. (f) The request for sale under this facility by the units approved under the 100% Export Oriented Unit Scheme may be made to the Export Commissioner in the Office of the Chief Controller of Imports Exports, New Delhi and units in the Export Processing Zones shall apply to the respective Development Commissioner. The request shall be supported by the following documents:- (i) A statement setting out the total number and ex-factory value of production of the unit during the relevent period and FOB value of items actually exported. The volume and value of rejects shall be distinctly indicated. (ii) A statement indicating the cost of the production constituents consisting of the imported and indigenous inputs, separately, under the categories of raw materials, components and consumables for the preceding period. (iii) These statements shall be certified by an independent Cost/Chartered Accountant and endorsed by the Customs/Central Excise Officer having jurisdiction over the unit. (iv) The Export Commissioner/Development Commissioner concerned will decide the extent to which the facility is available in accordance with para 2(d) above for the relevant time period for which it is sought and issue an authorisation which will constitute a permit for the removal of the specified quantity of goods for a specified value to the DTA. (g) If the product sought to be sold in the domestic tariff area requires any quality control certificate under any Act/Rule/Regulation, etc. such sale will be allowed only after production of such certificate. (h) The facility is, subject to such review, revision and curtailment as Government may consider necessary. (i) The facility will be available from 1st April, 1988 in respect of the output of the 100% Export Oriented Unit/unit in the Export Processing Zone/Free Trade Zones during the preceding 12 months commencing from 1-4-1987 to 31-3-1988. (j) Actual sale would be permitted if the acceptable level of value addition has been achieved, taking into account operational parameters. (k) Items may be considered for addition to the sensitive list on which the facility is not available, whenever Government consider it necessary so to do. Yours faithfully, Sd/- (MANJULA SUBRAMANIAM) JT. CHIEF CONTROLLER OF IMPORTS EXPORTS Copy for information to :- 1. Ministry of Commerce (Smt. C. G. Lal, Deputy Secretary). 2. Controller of Aid, Accounts and Audit, Deptt. of Economic Affairs, Ministry of Finance, New Delhi. 3. Department of Revenue (Shri P.N. Malhotra, Director). 4. PS to CC/PS to Addl. CC/PS to JS LA/FC/OSD(CA) /All JCs /All DCs/E.P. Cell/I.P. Cell/EP-I/EP-II/EP-III/CA Section/O M Section/Inspection Unit/ ECA Division/Vigilance Cell. Sd/- (Manjula Subramaniam) JT. CHIEF CONTROLLER OF IMPORTS EXPORTS