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GENERAL PROVISIONS REGARDING IMPORTS AND EXPORTS

Chapter 2 - Policy - Foreign Trade Policy - Foreign Trade Policy 2015-2020 (From 5-12-2017 to 31-3-2020) Revised - Chapter 2 - CHAPTER 2 2.00 Objective The general provisions governing import and export of goods and services are dealt with in this chapter. 2.01 Exports and Imports - Free , unless regulated (a) Exports and Imports shall be Free except when regulated by way of prohibition , restriction or exclusive trading through State Trading Enterprises (STEs) as laid down in Indian Trade Class .....

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t/ import. Goods are classified based on their group or sub-group at 2/4/6/8 digits. (b) ITC (HS) is aligned at 6 digit level with international Harmonized System goods nomenclature maintained by World Customs Organization (http://www.wcoomd.org). However, India maintains national Harmonized System of goods at 8 digit level which may be viewed by clicking on Downloads at http://dgft.gov.in (c) The import/export policies for all goods are indicated against each item in ITC (HS).Schedule 1 of ITC .....

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lly produced goods shall apply, mutatis mutandis, to imports, unless specifically exempted. (b) However, Goods to be utilized/ consumed in manufacture of export products, as notified by DGFT, may be exempted from domestic standards/ quality specifications. 2.04 Authority to specify Procedures DGFT may, specify Procedures to be followed by an exporter or importer or by any licensing/Regional Authority (RA) or by any other authority for purposes of implementing provisions of FT (D&R) Act, the .....

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l be separately issued by DGFT based on an application. (a) Application for obtaining IEC may be filed online in ANF 2A with applicable fees and submitted with digital signature. (b) When an e-IEC is approved by the competent authority, applicant is informed through e-mail that a computer generated e-IEC is available on the DGFT website. By clicking on Application Status after having filled and submitted the requisite details in Online IEC Application webpage, applicant can view and print his e- .....

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applicants may submit online application through digital signature (Class-II or Class-III), by paying applicable fees and uploading requisite documents, corresponding to the changes sought. (e) Detailed guidelines for applying for e-IEC is available at http://dgft.gov.in/exim/2000/iec_anf/iecanf.htm (II) No Export/Import without IEC: (i) No export or import shall be made by any person without obtaining an IEC number unless specifically exempted. (ii) Exempt categories and corresponding permanen .....

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al Receipt in form CN-22 or CN 23 as the case may be. 2. Commercial Invoice cum Packing List* 3. Bill of Entry [Note: *(i) As per CBEC Circulars issued under the Customs Act, 1962 (ii) Separate Commercial Invoice and Packing List would also be accepted.] (c) For export or import of specific goods or category of goods, which are subject to any restrictions/policy conditions or require NOC or product specific compliances under any statute, the regulatory authority concerned may notify additional d .....

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plant life or health; (c) Protection of patents, trademarks and copyrights, and the prevention of deceptive practices; (d) Prevention of use of prison labour; (e) Protection of national treasures of artistic, historic or archaeological value; (f) Conservation of exhaustible natural resources; (g) Protection of trade of fissionable material or material from which they are derived; (h) Prevention of traffic in arms, ammunition and implements of war (i) Relating to the importation or exportation of .....

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f Export & Import Items, shall be governed by the specific provisions of (i) Chapter IV A of the FT(D&R) Act, 1992 as amended from time to time (ii) Sl. No. 4 & 5 of Table A and Appendix-3 of Schedule 2 of ITC(HS) Classification of Export & Import Items (iii) Para 2.16, Para 2.17, Para 2.18 of FTP and (iv) Para 2.73 -2.82 of Hand Book of Procedures, in addition to the other provisions of FTP and Handbook of Procedures governing export Authorisations. 2.10 Actual User Condition Go .....

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ch other conditions as may be specified: (a) Description, quantity and value of goods; (b) Actual User condition (as defined in Chapter 9); (c) Export Obligation; (d) Minimum Value addition to be achieved; (e) Minimum export/import price; (f) Bank guarantee/ Legal undertaking / Bond with Customs Authority/RA (as in para 2. 35 of FTP). (g) Validity period of import/export as specified in Handbook of Procedures. 2.12 Application Fee Application for IEC/ Authorisation / License / Scrips must be acc .....

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vance are first warehoused against Bill of Entry for Warehousing and then cleared for home consumption against an Authorisation issued subsequently. This facility will however be not available to restricted items or items traded through STEs. 2.14 Authorisation - not a Right No person can claim an Authorisation as a right and DGFT or RA shall have power to refuse to grant or renew the same in accordance with provisions of FT (D&R) Act, Rules made there under and FTP. 2.15 Penal action and pl .....

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se of doing business, DGFT has provided for self certification system under various schemes. In such cases, applicants shall undertake self certification with sufficient care and caution in filling up information/particulars. Any information/particulars subsequently found untrue/incorrect will be liable for action under FTDR Act, 1992 and Rules therein in addition to penal action under any other Act/Order. c) A firm may be placed under Denied Entity List (DEL), by the concerned RA, under the pro .....

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can be placed in abeyance, for a period not more than 60 days at a time. e) A firm s name can be removed from DEL, by the concerned RA for reasons to be recorded in writing, if the firm completes Export Obligation/ pays penalty/ fulfils requirement of Demand Notice(s) issued by the RA/submits documents required by the RA. Prohibitions (Country, Organisations, Groups, Individuals etc. and Product Specific): 2.16 Prohibition on Import and Export of Arms and related material from / to Iraq Notwith .....

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ssociated with Al Qaida. In compliance with United Nations Security Council Resolution No. 2199 [2015] (full text of the Resolution is available at http://www.un.org/press/en/2015/ sc11775.doc.htm), trade in oil and refined oil products, modular refineries and related materials, besides items of cultural (including antiquities), scientific and religious importance is prohibited with the Islamic State in Iraq and the Levant [ISIL], Al Nusrah Front [ANF] and other individuals, groups, undertakings .....

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missile systems as defined for the purpose of the United Nations Register on Conventional Arms, or related materiel including spare parts; (ii) all arms and related materiel, including small arms and light weapons and their related materiel; (iii) all items, materials, equipment, goods and technology as set out in the United Nations Security Council (UNSC) and International Atomic Energy Agency (IAEA) documents, namely, 1. S/2006/853*; 2. S/2006/853/Corr.1; 3. Part B of S/2009/364; 4. Annex III .....

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not limited to, the items specified in Annex IV of Resolution 2094 (2013), Annex IV of Resolution 2270 (2016) and Annex IV of Resolution 2321 (2016); (v) items as determined by the Central Government, except food or medicine, that could directly contribute to the development of the Democratic People's Republic of Korea's operational capabilities of its armed forces. This measure is subject to the exemptions set out in paragraph 8 (a) and (b) of Resolution 2270 (2016); Prohibition on imp .....

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tha-type jet fuel, kerosene-type jet fuel, and kerosene-type rocket fuel. This measure is subject to the provisions of paragraph 31 of Resolution 2270 (2016) and paragraph 20 of Resolution of 2321 (2016); (iii) condensates and natural gas liquids; (iv) refined petroleum products. This measure is subject to the limits, exceptions and procedures set out in paragraph 5 of Resolution 2397 (2017); (v) crude oil. This measure is subject to the limits, exemptions and procedures set out in paragraph 4 o .....

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and procedures set out in paragraph 8 of Resolution 2371 (2017); (ii) gold, titanium ore, vanadium ore, and rare earth minerals; (iii) copper, nickel, silver and zinc; (iv) statues, unless the Committee approves on a case-by-case basis in advance; (v) seafood (including fish, crustaceans, mollusks, and other aquatic invertebrates in all forms). This measure is subject to the exemptions, clarifications and procedures set out in paragraph 9 of Resolution 2371 (2017) and paragraph 6 of Resolution 2 .....

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ITC(HS)], earth and stone including magnesite and magnesia [Chapter 25 of wood [Chapter 44 of ITC(HS)], and vessels [Chapter 89 of ITC(HS)]. These measures are subject to the procedures set out in paragraph 6 of Resolution 2397(2017). Explanation.- a) UNSC means the United Nations Security Council; b) IAEA means the International Atomic Energy Agency; c) Committee means the Committee of the UNSC set up in terms of paragraph 12 of Resolution 1718 (2006); d) Resolution, as the case may be, means t .....

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isions contained in Annex-B to the United Nations Security Council Resolution 2231 (2015): (i) Items listed in INFCIRC/254/Rev.9/Part 1 and INFCIRC /254/Rev.7 /Part 2 (IAEA Documents) as updated by the IAEA from time to time. (ii) Items listed in S/2006/263 (UN Security Council document) as updated by the Security Council from time to time. (b) All the UN Security Council Resolutions/Documents and IAEA Documents referred to above are available on the UN Security Council website (www.un.org/Docs/ .....

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ng Enterprises (STEs) are governmental and nongovernmental enterprises, including marketing boards, which deal with goods for export and /or import. Any good, import or export of which is governed through exclusive or special privilege granted to State Trading Enterprise (STE), may be imported or exported by the concerned STE as per conditions specified in ITC (HS). The list of STEs notified by DGFT is in Appendix-2J. (b) Such STE(s) shall make any such purchases or sales involving imports or ex .....

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ve trading through STEs. Trade with Specific Countries: 2.21 Trade with Neighbouring Countries DGFT may issue instructions or frame schemes as may be required to promote trade and strengthen economic ties with neighboring countries. 2.22 Transit Facility Transit of goods through India from/ or to countries adjacent to India shall be regulated in accordance with bilateral treaties between India and those countries and will be subject to such restrictions as may be specified by DGFT in accordance .....

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ts shall be free where such goods are otherwise freely importable under ITC (HS). In other cases, such imports shall be permitted against an Authorisation issued by DGFT. 2.26 Passenger Baggage (a) Bona-fide household goods and personal effects may be imported as part of passenger baggage as per limits, terms and conditions thereof in Baggage Rules notified by Ministry of Finance. (b) Samples of such items that are otherwise freely importable under FTP may also be imported as part of passenger b .....

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gradation or standardization of technology and re-imported without an Authorisation. 2.28 Import of goods used in projects abroad Project contractors after completion of projects abroad, may import without an Authorisation, goods including capital goods used in the project, provided they have been used for at least one year. 2.29 Import of Prototypes Import of new / second hand prototypes / second hand samples may be allowed on payment of duty without an Authorisation to an Actual User (industri .....

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e with FTP/ ITC (HS), 2017. Import Policy for Second Hand Goods: 2.31 Second Hand Goods S.No. Categories of Second Hand Goods Import Policy Conditions, if any I Second Hand Capital Goods Restricted Importable against Authorisation (a) i. Personal computers/ laptops including their refurbished/ re-conditioned spares ii. Photocopier machines/ Digital multifunction Print & Copying Machines iii. Air conditioners iv. Diesel generating sets. (b) Refurbished / re-conditioned spares of Capital Goods .....

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ishing of imported items is treated as per domestic Laws/ Rules/ Orders / Regulations/ technical specifications/ Environmental /safety and health norms and the imported item is re - exported back as per the Customs Notification.] Import Policy for Metallic Waste and Scraps: 2. 32 Import of Metallic waste and Scrap (a) Import of any form of metallic waste, scrap will be subject to the condition that it will not contain hazardous, toxic waste, radioactive contaminated waste/scrap containing radioa .....

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lowed to dispose of in DTA any waste or scrap, including any form of metallic waste and scrap, generated during manufacturing or processing activity, without an Authorisation, on payment of applicable Customs Duty. Other Provisions Related to Imports: 2.34 Import under Lease Financing No specific permission of RA is required for lease financed capital goods. 2.35 Execution of Legal Undertaking (LUT) / Bank Guarantee (BG) (a) Wherever any duty free import is allowed or where otherwise specificall .....

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regulations and notifications issued under the Customs Act, 1962. Any person may import goods except prohibited items, arms and ammunition, hazardous waste and chemicals and warehouse them in such bonded warehouses. (b) Such goods may be cleared for home consumption in accordance with provisions of FTP and against Authorisation, wherever required. Customs duty as applicable shall be paid at the time of clearance of such goods. (c) The clearance of the warehoused goods shall be as per the provisi .....

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oods may be exported without any restriction except to the extent that such exports are regulated by ITC (HS) or any other provision of FTP or any other law for the time being in force. DGFT may, however, specify through a public notice such terms and conditions according to which any goods, not included in ITC (HS), may be exported without an Authorisation. 2.40 Deleted 2.41 Benefits for Supporting Manufacturers For any benefit to accrue to the supporting manufacturer (as defined in Para 9.58 o .....

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(BRC), Export Order and Invoice should be in the name of third party exporter. . Exports of Specific Categories: 2.43 Export of Samples Export of Samples and Free of charge goods shall be governed by provisions given in Para 2.66 of Handbook of Procedures. 2.44 Export of Gifts Goods including edible items, of value not exceeding ₹ 5,00,000/- in a licensing year, may be exported as a gift. However, items mentioned as restricted for exports in ITC (HS) shall not be exported as a gift, witho .....

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heir personal consumption. The Provisions of the Para shall be subject to Baggage Rules issued under Customs Act, 1962. (b) Samples of such items that are otherwise freely exportable under FTP may also be exported as part of passenger baggage without an Authorisation. 2.46 Import for export I. (a) Goods imported, in accordance with FTP, may be exported in same or substantially the same form without an Authorisation provided that item to be imported or exported is not in the restricted for import .....

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tricted goods for import (except Prohibited items). (d) Capital goods, which are freely importable and freely exportable, may be imported for export on execution of LUT/BG with Customs Authority. (e) Notwithstanding the above, goods which are freely importable may be re-exported except items as in the Prohibited or SCOMET List of exports, in same or substantially same form even though such goods are under restricted list for export, subject to the following conditions: (i) Goods are not of India .....

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an) would be permitted against payment in Indian Rupees, subject to minimum 15% value addition. (c) However, re-export of food, medicine and medical equipments, namely, items covered under ITC(HS) Chapters 2 to 4, 7 to 11, 15 to 21, 23, 30 and items under headings 9018, 9019, 9020, 9021 & 9022 of Chapter-90 of ITC(HS) will not be subject to minimum value addition requirement for export to Iran. Exports of these items to Iran shall, however, be subject to all other conditions of FTP 2015-20 a .....

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in accordance with FTP/ ITC (HS), 2017. 2.48 Export of Replacement Goods Goods or parts thereof on being exported and found defective/damaged or otherwise unfit for use may be replaced free of charge by the exporter and such goods shall be allowed for export by Customs authorities, provided that replacement goods are not mentioned as restricted/SCOMET items for exports in ITC (HS). If the export item is restricted / under SCOMET, the exporter shall require a export license for replacement. 2.49 .....

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wever, re-export of such defective parts/spares by the Companies/firms and Original Equipment Manufacturers shall not be mandatory if they are imported exclusively for undertaking root cause analysis, testing and evaluation purpose. 2.50 Export of Spares Warranty spares (whether indigenous or imported) of plant, equipment, machinery, automobiles or any other goods [except those restricted under ITC (HS)] may be exported along with main equipment or subsequently but within contracted warranty per .....

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cure goods from domestic manufacturers without payment of duty. Supplies made by a domestic supplier to such notified warehouses shall be treated as physical exports provided payments are made in free foreign exchange. Payments and Receipts on Imports / Exports: 2.52 Denomination of Export Contracts (a) All export contracts and invoices shall be denominated either in freely convertible currency or Indian rupees but export proceeds shall be realized in freely convertible currency. (b) However, ex .....

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) on account of this transaction would be taken as export realization under export promotion schemes of FTP. (c) Contracts (for which payments are received through Asian Clearing Union (ACU) shall be denominated in ACU Dollar. However, participants in the ACU may settle their transactions in ACU Dollar or in ACU Euro as per RBI Notifications. Central Government may relax provisions of this paragraph in appropriate cases. Export contracts and invoices can be denominated in Indian rupees against E .....

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to realize export proceeds within time specified by RBI, he shall, without prejudice to any liability or penalty under any law in force, be liable to return all benefits / incentives availed against such exports and action in accordance with provisions of FT (D&R) Act, Rules and Orders made there under and FTP. (b) In case an Exporter is unable to realize the export proceeds for reasons beyond his control (force-majeure), he may approach RBI for writing off the unrealised amount as laid dow .....

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redit insurance support to exports and export credit lending. Covers issued by ECGC to exporters, protect against losses arising out of payment failures due to insolvency or default of the buyers or due to political risks. Exporters can diversify their markets in addition to protecting existing markets through such covers. ECGC also supports Medium and Long term (MLT) exports including project exports. Exim Bank is the other ECA in the business of lending for MLT exports and fronting the governm .....

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t Promotion Councils: 2.55 Recognition of EPCs to function as Registering Authority for issue of RCMC (a) Export Promotion Councils (EPCs) are organizations of exporters, set up with the objective to promote and develop Indian exports. Each Council is responsible for promotion of a particular group of products/ projects/services as given in Appendix 2T of AANF. (b) EPCs are also eligible to function as Registering Authorities to issue Registration-cum-Membership Certificate (RCMC) to its members .....

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thority in accordance with Procedures specified in Handbook of Procedures unless specifically exempted under FTP. Certificate of Registration as Exporter of Spices (CRES) issued by Spices Board and Certificate of Registration as Exporter of coir & coir products issued by the Coir Board shall be treated as Registration-Cum-Membership Certificate (RCMC) for the purposes under this Policy. Policy Interpretation and Relaxations: 2.57 Interpretation of Policy (a) The decision of DGFT shall be fin .....

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DGFT (PRC/PIC): Member Secretary (v) Any other person / representative of the concerned Ministry / Department, to be co-opted by the Chairman. 2.58 Exemption from Policy/Procedures DGFT may in public interest pass such orders or grant such exemption, relaxation or relief, as he may deem fit and proper, on grounds of genuine hardship and adverse impact on trade to any person or class or category of persons from any provision of FTP or any Procedures. While granting such exemption, DGFT may impos .....

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n of Policy and Procedures on grounds of genuine hardship and adverse impact on trade. If an importer/exporter is aggrieved by any decision taken by Policy Relaxation Committee (PRC), or a decision/order by any authority in the Directorate General of Foreign Trade, a specific request for Personal Hearing (PH) along with the prescribed application fee as per Appendix-2K has to be made to DGFT. DGFT may consider request for relaxation after consulting concerned Norms Committee, EPCG Committee or P .....

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nt Commission With a view to providing assistance to firms who have defaulted under FTP for reasons beyond their control as also facilitating merger, acquisition and rehabilitation of sick units, it has been decided to empower Settlement Commission in Department of Revenue to decide such cases also with effect from 01.04.2005. Self Certification of Originating Goods: 2.61 Approved Exporter Scheme for Self Certification of Certificate of Origin. (i) Currently, Certificates of Origin under various .....

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