TMI BlogDUTY EXEMPTION / REMISSION SCHEMESX X X X Extracts X X X X X X X X Extracts X X X X ..... of export product, may also be allowed. (b) Advance Authorisation is issued for inputs in relation to resultant product, on the following basis: (i) As per Standard Input Output Norms (SION) notified (available in Hand Book of Procedures); OR (ii) On the basis of self declaration as per paragraph 4.07 of Handbook of Procedures. 4.04 Advance Authorisation for Spices Duty free import of spices covered under Chapter-9 of ITC (HS) shall be permitted only for activities like crushing / grinding / sterilization / manufacture of oils or oleoresins. Authorisation shall not be available for simply cleaning, grading, re-packing etc. 7 [4.04A Special Advance Authorisation Scheme for export of Articles of Apparel and Clothing accessories. Duty free import of fabric under 'Special Advance Authorisation Scheme for export of Articles of Apparel and Clothing Accessories' shall be allowed, as per Customs Notification issued for this scheme, for export of items covered under Chapter 61 and 62 of ITC(HS) Classification of Export and Import, subject to the following terms and conditions: (i) The authorisation shall be issued based on Standard Input output Norms ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n shall be issued for: (i) Physical export (including export to SEZ); (ii) Intermediate supply; and/or (iii) Supply of goods to the categories mentioned in paragraph 7.02 (b), (c), (e), (f), (g) and (h) of this FTP. (iv) Supply of stores on board of foreign going vessel / aircraft, subject to condition that there is specific Standard Input Output Norms in respect of item supplied. 4.06 Advance Authorisation for Annual Requirement (i) Advance Authorisation for Annual Requirement shall only be issued for items notified in Standard Input Output Norms (SION), and it shall not be available in case of adhoc norms under paragraph 4.03 (b)(ii) of FTP. (ii) Advance Authorisation for Annual Requirement shall also not be available in respect of SION where any item of input appears in Appendix 4-J. 4.07 Eligibility Condition to obtain Advance Authorisation for Annual Requirement (i) Exporters having past export performance (in at least preceding two financial years) shall be entitled for Advance Authorisation for Annual requirement. (ii) Entitlement in terms of CIF value of imports shall be upto 300% of the FOB value of physical export and / or FOR value of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... graph 4.06 of Hand Book of Procedures to the Norms Committee. (c) Where export and/or import of biotechnology items and related products are involved, Authorisation under paragraph 4.07 of Handbook of Procedures shall be issued by Regional Authority only on submission of a No Objection Certificate from Department of Biotechnology. 4.12 Accounting of Input (i) Wherever SION permits use of either (a) a generic input or (b) alternative input, unless the name of the specific input [which has been used in manufacturing the export product] gets indicated / endorsed in the relevant shipping bill and these inputs, so endorsed, match the description in the relevant bill of entry, the concerned Authorisation will not be redeemed. In other words, the name/description of the input used (or to be used) in the Authorisation must match exactly with the name/description endorsed in the shipping bill. (ii) In addition, if in any SION, a single quantity has been indicated against a number of 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 over ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o clearly endorse details of such duty paid inputs in the condition sheet of the Advance Authorisation. 4.16 Actual User Condition for Advance Authorisation (i) Advance Authorisation and / or material imported under Advance Authorisation shall be subject to Actual User condition. The same shall not be transferable even after completion of export obligation. However, Authorisation holder will have option to dispose of product manufactured out of duty free input once export obligation is completed. (ii) In case where CENVAT credit facility on input has been availed for the exported goods, even after completion of export obligation, the goods imported against such Advance Authorisation shall be utilized only in the manufacture of dutiable goods whether within the same factory or outside (by a supporting manufacturer). For this, the Authorisation holder shall produce a certificate from either the jurisdictional Central Excise Authority or Chartered Accountant, at the option of the exporter, at the time of filing application for Export Obligation Discharge Certificate to Regional Authority concerned. (iii) Waste / scrap arising out of manufacturing process, as allowed, c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in the CIF value of import and FOB value of export for the purpose of computation of value addition. However, realization of export proceeds will be equivalent to an amount excluding notional value of such input. 4.20 Domestic Sourcing of Inputs (i) Holder of an Advance Authorisation / Duty Free Import Authorisation can procure inputs from indigenous supplier/ State Trading Enterprise in lieu of direct import. Such procurement can be against Advance Release Order (ARO), Invalidation Letter, Back-to-Back Inland Letter of Credit. (ii) When domestic supplier intends to obtain duty free material for inputs through Advance Authorisation for supplying resultant product to another Advance Authorisation / DFIA / EPCG Authorisation, Regional Authority shall issue Invalidation Letter. (iii) Regional Authority shall issue Advance Release Order if the domestic supplier intends to seek refund of duty through Deemed Exports mechanism as per provisions under Chapter-7 of FTP. (iv) Regional Authority may issue Advance Release Order or Invalidation Letter at the time of issue of Authorisation simultaneously or subsequently. (v) Advance Authorisation holder under DTA can procur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch is under BIFR / Rehabilitation, may be permitted export obligation extension for the Advance Authorisation(s) held by the acquired unit, as per rehabilitation package prepared by operating agency and approved by BIFR / Rehabilitation Department of State Government. If time-period upto which EO extension is to be granted is not specifically mentioned in the BIFR order, EO extension of two years from the date of expiry of EOP (including extended period) or the date of BIFR order, whichever is later, shall be granted without payment of composition fee. 4.24 Re-import of exported goods under Duty Exemption / Remission Scheme Goods exported under Advance Authorisation / Duty Free Import Authorisation may be re-imported in same or substantially same form subject to such conditions as may be specified by Department of Revenue. Authorisation holder shall also inform about such re-importation to the Regional Authority which had issued the Authorisation within one month from date of re-import. DUTY FREE IMPORT AUTHORISATION SCHEME (DFIA) 4.25 DFIA Scheme (a) Duty Free Import Authorisation is issued to allow duty free import of inputs. In addition, import of oil and ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Airway Bill/ Bill of Export / ARE-1 / ARE-3, Central Excise certified Invoice. (iv) After completion of exports and realization of proceeds, request for issuance of transferable Duty Free Import Authorisation may be made to concerned Regional Authority within a period of twelve months from the date of export or six months (or additional time allowed by RBI for realization) from the date of realization of export proceeds, whichever is later. 12[(v) Applicant shall be allowed to file application beyond 24 months from the date of generation of file number as per paragraph 9.02 of Hand Book of Procedures. ] (vi) Separate DFIA shall be issued for each SION and each port. (vii) Exports under DFIA shall be made from from a single port as mentioned in paragraph 4.37 of Handbook of Procedures. 13 [(viii) No Duty Free Import Authorisation shall be issued for an input where SION prescribes 'Actual User' condition and/or Appendix-4J prescribes pre import condition for such an input. ] (ix) Regional Authority shall issue transferable DFIA with a validity of 12 months from the date of issue. No further revalidation shall be granted by Regional Authority. 4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uding mountings and findings may obtain gold / silver / platinum as an input for export product from Nominated Agency, in advance or as replenishment after export in accordance with the procedure specified in this behalf. In case where CENVAT credit facility on Precious metal (Gold, Silver and Platinum) as input has been 10 [ availed and/or Gems ] and Jewellery products are exported availing rebate, then replenishment of Precious metal shall be allowed provided that such inputs procured duty free are used in the manufacture of dutiable goods in the factory/unit, where exported Gems and Jewellery products were manufactured. Sale/transfer of such duty free Precious metal inputs shall not be allowed. ] (ii) The export would be subject to wastage norms and minimum value addition as prescribed in paragraph 4.60 and 4.61 respectively in the Handbook of Procedures. 4.35 Replenishment Authorisation for Gems (i) Exporter may obtain Replenishment Authorisation for Gems from Regional Authority in accordance with procedure specified in Handbook of Procedures. (ii) Replenishment Authorisation for Gems may be issued against export including that made against suppl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... = FOB value of the export realised / FOR value of supply received. 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. Wherever gold has been obtained on loan basis, value shall also include interest paid in free foreign exchange to foreign supplier. 4.39 Wastage Norms Wastage or manufacturing loss for gold / silver / platinum jewellery shall be admissible as per paragraph 4.60 of Handbook of Procedures. 4.40 DFIA not available Duty Free Import Authorisation scheme shall not be available for Gems and Jewellery sector. 4.41 Nominated Agencies (i) Exporters may obtain gold / silver / platinum from Nominated Agency. Exporter in EOU and units in SEZ would be governed by the respective provisions of Chapter-6 of FTP / SEZ Rules, respectively. (ii) Nominated Agencies are MMTC Ltd, The Handicraft and Handlooms Exports Corporation of India Ltd, The State Trading Corporation of India Ltd, PEC Ltd, STCL Ltd, MSTC Ltd, and Diamond India Limited (iii) 17 [Notwithstanding any provision relating to import of gold by Nominat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ity at zero duty within 3 months from the date of export. Such facility of export and subsequent reimport at zero duty will be subject to guidelines issued by Central Board of Customs Excise, Department of Revenue] 4.45 Export against Supply by Foreign Buyer (i) Where export orders are placed on nominated agencies / status holder / exporters of three years standing having an annual average turnover of Rupees five crores during preceding three financial years, foreign buyer may supply in advance and free of charge, gold / silver / platinum, alloys, findings and mountings of gold / silver / platinum for manufacture and export. (ii) Such supplies can also be in advance and may involve semi-finished jewellery including findings / mountings / components for repairs / re-make and export subject to minimum value addition as prescribed under paragraph 4.61 of Handbook of Procedures. In such cases of export, wastage norms as per paragraph 4.60 of Handbook of Procedures shall apply. (iii) Exports may be made by nominated agencies directly or through their associates or by status holder / exporter. Import and Export of findings shall be on net to net basis. 4.46 Export Pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... used only for: (i) Import / purchase of rough diamonds from overseas/ local sources; (ii) Purchase of cut and polished diamonds, coloured gemstones and plain gold jewellery from local sources; (iii) Import / purchase of gold from overseas / nominated agencies and repayment of dollar loans from the bank; and (iv) Transfer to Rupee Account of exporter. Details of this DDA Scheme are given in Handbook of Procedures. (c) A non DDA holder is also permitted to supply cut and polished diamonds to DDA holder, receive payment in dollars and convert the 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. 4.51 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. 4.52 Re-import of rejected Jewellery G ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 15 5. Inserted vide Not. 28/2015-20 - Dated 16-12-2015 6. Inserted vide Not. 33/2015-2020 - Dated 21-1-2016 7. Inserted vide Not. 21/2015-2020 - Dated 11-8-2016 with effect from 1st September 2016 8. Substituted vide Not. 39/2015-2020 - Dated 22-2-2017 , before it was read as, 4.44 Export of Cut Polished Diamonds with Re-import Facility at Zero Duty An exporter (with annual export turnover of ₹ 5 crores for each of the last three years) may export cut polished diamonds (each of 0.25 carat or above) to any of the agencies/laboratories mentioned under paragraph 4.74 of Handbook of Procedures with re-import facility at zero duty within 3 months from the date of export. Such facility of re-import at zero duty will be subject to guidelines issued by Central Board of Customs Excise, Department of Revenue. 9. Substituted vide Not. 40/2015-2020 - Dated 23-2-2017 , before it was read as, (i) Exporter of gold / silver / platinum jewellery and articles thereof including mountings and findings may obtain gold / silver / platinum as an input for export product from Nominated Agency, in advance or as replenishment after export in accordance with ..... X X X X Extracts X X X X X X X X Extracts X X X X
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