TMI BlogDUTY EXEMPTION & REMISSION SCHEMESX X X X Extracts X X X X X X X X Extracts X X X X ..... Value Addition Value addition (VA) for the purpose of this Chapter (Except for Gems and Jewellery Sector) shall be:- VA A - B = ----------- x 100, where B A = FOB value of export realised / FOR value of supply received. B = CIF value of inputs covered by authorisation, plus value of any other input used on which benefit of DBK is claimed or intended to be claimed. ADVANCE AUTHORISATION SCHEME 4.1.3.1 Advance Authorisation An Advance Authorisation is issued to allow duty free import of inputs, which are physically incorporated in export product (making normal allowance for wastage). In addition, fuel, oil, 4 [***] catalysts which are consumed / utilised to obtain export product, may also be allowed. DGFT, by means of Public Notice, may exclude any product(s) from the purview of Advance Authorisation. 4.1.3.2 Mandatory spares which are required to be exported / supplied with the resultant product can be allowed duty free but upto 10% of CIF value of Authorisation. 4.1.3.3 Advance Authorisations are issued for inputs and export items given under SION. These can also be issued on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , even after completion of export obligation, the goods imported against Advance Authorisation shall be utilized only in the manufacture of dutiable goods whether within the same factory or outside (by a supporting manufacturer), for which the authorisation holder shall produce a certificate from either the jurisdictional Central Excise Superintendent or Chartered Accountant, at the option of the exporter, at the time of filing application for EODC to RA concerned. (b) Further the manufacturing wastes / scrap, as allowed, can be disposed off with the payment of applicable duty even before fulfilment of export obligation. 4.1.6 Minimum Value Addition (a) Advance Authorisation necessitates exports with a minimum value addition of 15%, except for items specified in Appendix 11B of HBP v1 and for items in Gems Jewellery Sector, for which value addition would be as per paragraph 4A.2.1 of HBP v1. Exports to SEZ Units / supplies to Developers / Co-developers, irrespective of currency of realization, would also be covered. (b) For physical exports for which payments are not received in freely convertible currency, same shall be subject to value addition as s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (a) Holder of Advance Authorisation, Advance Authorisation for annual requirement and Duty Free Import Authorisation intending to source inputs from indigenous sources / State Trading Enterprises in lieu of direct import has option to source them either against Advance Release Order (ARO) or Invalidation letter denominated in free foreign exchange / Indian rupees. However, supplies may be obtained against Authorisation from EOU / EHTP / BTP / STP / SEZ units, without conversion into ARO or Invalidation letter. (b) Transferee of DFIA shall also be eligible for ARO / invalidation letter facility. Validity period of ARO shall be as prescribed in HBP v1. 4.1.12 Back-to-Back Inland Letter of Credit Holder of Advance Authorisation, Advance Authorisation for Annual Requirement and DFIA may, instead of applying for an ARO or Invalidation letter, avail of the facility of Back-to-Back Inland Letter of Credit in accordance with procedure specified in HBP v1. 4.1.13 Importability /Exportability of items that are Prohibited / Restricted/ STE (a) No export or import of an item shall be allowed under Advance Authorisation / DFIA if the item is prohibited ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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, 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 bills. (c) At the time of discharge of export obligation (EODC) or at the time of redemption, RA shall allow only those inputs which have been specifically indicated in the shipping bill.] DUTY FREE IMPORT AUTHORISATION (DFIA) SCHEME 4.2.1 Scheme DFIA is issued to allow duty free import of inputs, fuel, oil, energy sources, catalyst which are required for production of export product. DGFT, by means of Public Notice, may exclude any product(s) from purview of DFIA. 4.2.2 Entitlement (a) Provisions of paragraph 4.1.3 shall be applicable in case of DFIA. However, these Authorisations shall be issued only for products for which Standard Input and Output Norms (SION) have been notified. (b) DFIA shall be issued in accordance with Policy and procedure in force on date of issue o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mports / domestic procurement against authorisation or transfer of imported inputs / domestically procured inputs shall be subject to payment of applicable additional customs duty / excise duty. While endorsing transferability, authorisation would bear a note as to liability of such additional customs duty / excise duty. However, in case where CENVAT facility has not been availed, exemption from additional customs duty / excise duty would be available even after endorsement of transferability on DFIA. 3 [(d) Exemption from Antidumping Duty and Safeguard Duty would be available on actual user basis only, i.e. before endorsement of transferability] 4.2.7 CENVAT Facility CENVAT credit facility shall be available for inputs either imported or procured indigenously. DUTY ENTITLEMENT PASSBOOK (DEPB) SCHEME 4.3 Duty Entitlement Passbook Scheme (DEPB) Objective of DEPB is to neutralise incidence of customs duty on import content of export product. Component of customs duty on fuel (appearing as consumable in the SION) shall also be factored in DEPB rate. Component of Special Additional Duty shall also be allowed under DEPB (as brand r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... GEMS AND JEWELLERY 4A Scheme for Gems and Jewellery Exporters of gems and Jewellery can import / procure duty free inputs for manufacturing. 4A.1 Replenishment Authorisation (a) Exporters may obtain Replenishment (REP) Authorisations from RA in accordance with procedure specified in HBP v1. (b) Replenishment authorisation may also be for consumables as per paragraph 4A.28 of HBP v1. 4A.2 Import of Diamonds for Certification / Grading Re-export The authorised offices/agencies in India of Gemological Institute of America (GIA) or any other agency approved in this regard shall be permitted to import diamonds to their laboratories for the purpose of certification/grading reports by them with a condition that the same should be re-exported with the certification/grading reports issued by them without any import duty as per the procedure laid down in HBP v1. 4A.2.1 Export of Cut Polished Diamonds for Certification/ Grading Re-import Following are authorised laboratories for certification/grading of diamonds of 7 [0.10] carat and above (i) Indian Diamond Institute, Surat, Gujarat; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... emier Trading House under Paragraph 3.10.2 of FTP and any other agency authorised by RBI. Exporters (except EOUs and units in SEZ) may obtain gold / silver / platinum from nominated agency(ies). (b) Procedure for import of precious metal by these agencies (other than those authorized by RBI and the Gems Jewellery units operating under EOU and SEZ schemes) and the monitoring mechanism thereof shall be as per the provisions laid down in HBP v1 in this regard. (c) A bank authorised by RBI is allowed export of gold scrap for refining and import standard gold bars as per RBI guidelines. 4A.5 Items of Export Following items, if exported, would be eligible for facilities: (a) 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; (b) 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; (c) Platinum jewellery including partly processed jew ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5 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. 4A.11 Such authorisations shall carry an export obligation to be fulfilled as per procedure specified in paragraph 4A.2.1 of HBP v1. Value addition shall be as per paragraph 4A.2.1 of the HBPv1. Advance Authorisation holder may obtain gold / silver / platinum from nominated agencies in lieu of direct import. 4A.12 Gem Replenishment Authorisation Gem Replenishment (Gem Jewellery REP) Authorisation may be issued as given in paragraph 4A.8, 4A.9 and 4A.10 above. In case of plain or studded gold / silver / platinum jewellery and articles, value of such Authorisations shall be determined with reference to realisation in excess of prescribed minimum VA. Such Gem REP Authorisations shall be freely transferable. 4A.13 Gem REP Rate and Item Replenishment Rate and item of import will be as prescribed in Appendix 12B of HBP v1. 4A.14 Export Promotion Tours/ Export of Branded Jewellery (a) Nominate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ive payment in dollars and convert 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. 4A.18 Export of cut polished precious and semi-precious stones for treatment and re-import Gems and Jewellery exporters shall be allowed to export cut and polished precious and semi-precious stones for the treatment and re-import as per customs rules and regulations. In case of re-export, the exporter shall be entitled for duty drawback as per rules. 4A.19 Re-import of rejected jewellery Gems Jewellery exporters shall be allowed to re-import rejected precious metal jewellery as per para 4A.32 of HBP v1. 4A.20 Export and imports on consignment basis Gems Jewellery exporters shall be allowed to export and import diamond, gemstones jewellery on consignment basis as per HBP v1 and Customs rules and regulations. ------------------------- Notes:- 1. Inserted vide Notification No.11 (RE-2012) /2009-2014, Dated 22/0 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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