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GENERAL PROVISIONS REGARDING IMPORTS AND EXPORTS

Chapter 2 - Policy - Foreign Trade Policy - DGFT - 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 Classification (Harmonized System) [ITC (HS)] of Exports and Imports. .....

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p 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 (HS) lays down the Import Policy regime while Schedule 2 of ITC .....

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less 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 Rules and the Orders made there under and FTP. Such procedures, .....

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ication 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-IEC. (c) The applicant may submit online application with the fo .....

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ure (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 permanent IEC numbers are given in Para 2.07 of Handbook of Procedures. .....

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ial 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 documents for purposes of export or import. (d) In specific cases .....

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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 gold or silver. 2.08 Export/Import of Restricted Goods/Services .....

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rovisions 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 Goods which are importable freely without any Restriction may be i .....

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ty 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 accompanied by application fees as indicated in the Appendix 2K of .....

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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 placing of an entity in Denied Entity List (DEL) a) If an Authoris .....

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ystem 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 provision of Rule 7 of Foreign Trade (Regulation) Rules, 1993. On i .....

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t 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 Notwithstanding the policy on Arms and related materials in Chapter 93 .....

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ity 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 and entities associated, directly or indirectly, with Al Qaida. .....

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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/sc) and IAEA websit .....

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s) 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 exports solely in acc .....

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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 with International .....

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ere 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 baggage without an A .....

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rdization 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 (industrial) engaged in prod .....

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), 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 Free Subject to pr .....

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c waste, radioactive contaminated waste/scrap containing radioactive material, any types of arms, ammunition, mines, shells, live or used cartridge or any other explosive material in any form either used or otherwise as detailed in Para 2.54 of Handbook of Procedures. (b) The types of metallic waste and scrap which can be imported freely, and the Procedures of import in the shredded form; unshredded compressed and loose form is laid down in Para 2.54 of Handbook of Procedures. 2.33 Removal of Sc .....

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any duty free import is allowed or where otherwise specifically stated, importer shall execute, Legal Undertaking (LUT) / Bank Guarantee (BG) / Bond with the Customs Authority, as prescribed, before clearance of goods. (b) In case of indigenous sourcing, Authorisation holder shall furnish LUT/BG/Bond to RA concerned before sourcing material from indigenous supplier/nominated agency as prescribed in Chapter 2 of Handbook of Procedures. 2.36 Private/Public Bonded Warehouses for Imports (a) Privat .....

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e clearance of the warehoused goods shall be as per the provisions of the Customs Act, 1962. 2.37 Special provision for Hides Skins and semi-finished goods Hides, Skins and semi-finished leather may be imported in the Public/ Private Bonded warehouse for the purpose of DTA sale and the unsold items thereof can be re-exported from such bonded warehouses on payment of the applicable rate of export duty. 2.38 Sale on High Seas Sale of goods on high seas for import into India may be made subject to .....

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ccrue to the supporting manufacturer (as defined in Para 9.58 of FTP), the names of both supporting manufacturer as well as the merchant exporter must figure in the concerned export documents, especially in ARE-1 / ARE-3 / Shipping Bill / Bill of Export/ Airway Bill. 2.42 Third Party Exports Third party exports (except Deemed Export) as defined in Chapter 9 shall be allowed under FTP. In such cases, export documents such as shipping bill shall indicate name of both manufacturing exporter/manufac .....

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for exports in ITC (HS) shall not be exported as a gift, without an Authorisation. 2.45 Export of Passenger Baggage (a) Bona-fide personal baggage may be exported either along with passenger or, if unaccompanied, within one year before or after passenger s departure from India. However, items mentioned as restricted in ITC (HS) shall require an Authorisation. Government of India officials proceeding abroad on official postings shall, however, be permitted to carry along with their personal bagg .....

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to be imported or exported is not in the restricted for import or export in ITC (HS). (b) Goods, including capital goods (both new and second hand), may be imported for export provided: i. Importer clears goods under Customs Bond; ii. Goods are freely exportable, i.e., are not Restricted / Prohibited / subject to exclusive trading through State Trading Enterprises or any conditionality/ requirement as may be required under Schedule 2 - Export Policy of the ITC (HS); iii. Export is against freel .....

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subject to the following conditions: (i) Goods are not of Indian Origin; (ii) Goods imported shall be kept in bonded warehouse under supervision of Customs; (iii) Goods to be exported have never been cleared for home consumption; (iv) Export of goods shall be subjected to Section 69 of Customs Act, 1962. II. (a) Goods imported against payment in freely convertible currency would be permitted for export only against payment in freely convertible currency, unless otherwise notified by DGFT. (b) Ex .....

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l, however, be subject to all other conditions of FTP 2015-20 and ITC (HS) 2017, as applicable. Bird s eggs covered under ITC (HS) 0407 & 0408 and Rice covered under ITC (HS) 1006 are not covered under this dispensation, as at II (a) above. (d) Exports under this dispensation, as at I (e) and II (a), (b) and (c) above shall not be eligible for any export incentives. 2.47 Export through Courier Service/Post Exports through a registered courier service is permitted as per Notification issued b .....

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exporter shall require a export license for replacement. 2.49 Export of Repaired Goods Goods or parts thereof, except restricted under ITC (HS), on being exported and found defective, damaged or otherwise unfit for use may be imported for repair and subsequent re-export. Such goods shall be allowed clearance without an Authorisation and in accordance with customs notification. To that extent the exporter shall return the benefits /incentive availed on the returned goods. If the item is restrict .....

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in equipment or subsequently but within contracted warranty period of such goods, subject to approval of RBI. 2.50A Re-export of imported Goods found defective and unsuitable for use: Imported goods found defective after Customs clearance, or not found as per specifications or requirements may be re-exported back as per Customs Act, 1962. 2.51 Private Bonded Warehouses for Exports (a) Private bonded warehouses exclusively for exports may be set up in DTA as per terms and conditions of notificati .....

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all be realized in freely convertible currency. (b) However, export proceeds against specific exports may also be realized in rupees, provided it is through a freely convertible Vostro account of a non resident bank situated in any country other than a member country of Asian Clearing Union (ACU) or Nepal or Bhutan. Additionally, rupee payment through Vostro account must be against payment in free foreign currency by buyer in his non- resident bank account. Free foreign exchange remitted by buye .....

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acts and invoices can be denominated in Indian rupees against EXIM Bank/Government of India line of credit. 2.53 Export to Iran -Realisations in Indian Rupees to be eligible for FTP benefits / incentives Notwithstanding the provisions contained in para 2.52 (a) above, export proceeds realized in Indian Rupees against exports to Iran are permitted to avail exports benefits / incentives under the Foreign Trade Policy (2015-20), at par with export proceeds realized in freely convertible currency. 2 .....

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approach RBI for writing off the unrealised amount as laid down in Para 2.87 of Handbook of Procedures. (c) The payment realized through insurance cover, would be eligible for benefits under FTP as per Procedures laid down in Para 2.85 of Handbook of Procedures. 2.54A Export Credit Agencies (ECAs) (i) Export Credit Agencies (ECAs) are policy instrument for Government to support exports. ECAs support exports by insurance, guarantee and also direct lending. Export Credit Agencies (ECAs) like Expo .....

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he business of lending for MLT exports and fronting the government s line of credit. (ii) ECGC indemnifies losses of exporters in export trade due to insolvency or default of the buyer. Additionally losses due to political risk like war, sudden import restriction, promulgation of law or decree after the shipment has been effected are also covered. Some of the anti- dumping measures or non-tariff barriers introduced after a shipment has been made will come under the purview of the political risk. .....

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e Registration-cum-Membership Certificate (RCMC) to its members. The criteria for EPCs to be recognized as Registering Authorities for issue of RCMC to its members are detailed in Para 2.92 of the Handbook of Procedures. 2.56 Registration-cum-Membership Certificate (RCMC) Any person, applying for: (a) An Authorisation to import/export (except items) listed as Restricted items in ITC (HS) Or (b) Any other benefit or concession under FTP shall be required to furnish or upload on DGFT s website in .....

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Interpretation of Policy (a) The decision of DGFT shall be final and binding on all matters relating to interpretation of Policy, or provision in Handbook of Procedures, Appendices and Aayat Niryat Forms or classification of any item for import / export in the ITC (HS). (b) A Policy Interpretation Committee (PIC) may be constituted to aid and advice DGFT. The composition of the PIC would be as follows: (i) DGFT: Chairman (ii) All Additional DGFTs in Headquarters: Members (iii) All Joint DGFTs i .....

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r any Procedures. While granting such exemption, DGFT may impose such conditions as he may deem fit after consulting the Committees as under: Sl.No. Description Committee (a) Fixation / modification of product norms Norms Committees (b) Nexus with Capital Goods (CG) and benefits under EPCG Schemes EPCG Committee (c) All other issues Policy Relaxation Committee (PRC) 2.59 Personal Hearing by DGFT for Grievance Redressal (a) Government is committed to easy and speedy redressal of grievances from T .....

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after consulting concerned Norms Committee, EPCG Committee or Policy Relaxation Committee (PRC) and the decision conveyed in pursuance to the personal hearing shall be final and binding. (b) The opportunity for Personal Hearing will not apply to a decision/order made in any proceeding, including an adjudication proceeding, whether at the original stage or at the appellate stage, under the relevant provisions of FT (D&R) Act, 1992, as amended from time to time. 2.60 Regularization of EO defau .....

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