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DUTY EXEMPTION /REMISSION SCHEMES

import of inputs for export production, including replenishment of inputs or duty remission. 4.01 Schemes (a) Duty Exemption Schemes. The Duty Exemption schemes consist of the following: • Advance Authorisation (AA) (which will include Advance Authorisation for Annual Requirement). • Duty Free Import Authorisation (DFIA). (b) Duty Remission Scheme. Duty Drawback (DBK) Scheme, administered by Department of Revenue. 12[(c) Scheme for Rebate on State and Central Taxes and Levies (RoSCTL), as notified by the Ministry of Textiles on 07.03.2019, and implemented by the DGFT.] 4.02 Applicability of Policy & Procedures Authorisation under this Chapter shall be issued in accordance with the Policy and Procedures in force on the date of issue of the Authorisation. 4.03 AdvanceAuthorisation (a) Advance Authorisation is issued to allow duty free import of input, which is physically incorporated in export product (making normal allowance for wastage). In addition, fuel, oil, catalyst which is consumed / utilized in the process of production of export product, may also be allowed. (b) Advance Authorisation is issued for inputs in relation to resultant product, on the following basis .....

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even after completion of export obligation. However fabric imported may be transferred for job work in terms of provisions of GST Acts under intimation to the Customs authority at the port of registration (excluding to units located in areas eligible for area based exemption from Central Excise Duty). Invalidation of the Authorisation shall not be permitted. (vi) The fabric imported shall be subject to pre-import condition and it shall be physically incorporated in the export product (making normal allowance for wastage). Only Physical exports shall fulfil the export obligation. (vii) Provisions of paragraphs 4.02, 4.05(a), 4.13(i), 4.13(ii), 4.14, 4.15, 4.17, 4.19, 4.21(i), 4.21(ii), 4.21 (iii), 4.21(v), 4.22(i), and 4.24 of Foreign Trade Policy shall be applicable in so far as they are not inconsistent with this scheme. 4.05 Eligible Applicant / Export / Supply (a) Advance Authorisation can be issued either to a manufacturer exporter or merchant exporter tied to supporting manufacturer. (b) Advance Authorisation for pharmaceutical products manufactured through Non-Infringing (NI) process (as indicated in paragraph 4.18 of Handbook of Procedures) shall be issued to manufacturer ex .....

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The scheme shall not be available for the following export products. a) All items covered under Chapter-1 to 24 and Chapter-71 of ITC(HS) Classification; b) Biotechnology items and related products; and c) SCOMET items. vi. The scheme shall not be available for the following inputs. a) All vegetable / edible oils classified under Chapter-15 and all types of oilseeds classified under Chapter-12 of ITC (HS) book; b) All types of cereals classified under Chapter-10 of ITC (HS) book; c) Horn, hoof and any other organ of animal; d) Wild animal products, organs and waste thereof; e) Honey; f) All items with basic customs duty of 30% or more; g) All types of fruits/ nuts/ vegetables classified under Chapter-7 and Chapter-8 of ITC (HS) book; h) Items covered under heading 2515, 2516, 3301, 3302, 3303 6801 and 6802 of ITC(HS) Classification; i) Items covered under Chapter 50 to 63 of ITC(HS) classification. j) Acetic Anhydride, Ephedrine and Pseudoephedrine; k) Vitamins; l) Biotechnology items and related products; m) Insecticides, Rodenticides, Fungicides, herbicides, Anti sprouting products, and plant growth regulators, disinfectants and similar products of all forms, types and grades; n) .....

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nd rules made there under. In addition, such cases shall also be referred to The Institute of Engineers India for taking action as warranted under the bylaws of the institute. xiii. All the provisions applicable for Advance Authorisation Scheme shall be applicable to this scheme also in so far they are not inconsistent with this scheme. 4.08 Value Addition Value Addition for the purpose of this Chapter (except for Gems and Jewellery sector for which value addition is prescribed in paragraph 4.38 of FTP) shall be:- VA = A-B x100, where B A =FOB value of export realized/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. 4.09 Minimum Value Addition (i) Minimum value addition required to be achieved under Advance Authorisation is 15%. (ii) Export Products where value addition could be less than 15% are given in Appendix 4D. (iii) Deleted (iv) Minimum value addition for Gems & Jewellery Sector is given in paragraph 4.61 of Handbook of Procedures. (v) In case of Tea, minimum value addition shall be 50%. 4.10 Import of Mandatory Spares Import of mandatory spares .....

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ty 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. (iii) At the time of discharge of export obligation (issue of EODC) or at the time of redemption, Regional Authority shall allow only those inputs which have been specifically indicated in the shipping bill together with quantity. (iv) The above provisions will also be applicable for supplies to SEZs and supplies made under Deemed exports. Details as given above will have to be indicated in the relevant Bill of Export, ARE-3, Central Excise certified Invoice / import document / Tax Invoice for export prescribed under the GST rules 4.13 Pre-import condition in certain cases (i) DGFT may, by Notification, impose pre-import condition for inputs under this Chapter. (ii) Import items subject to pre-import condition are listed in Appendix 4-J or will be as indicated in Standard Input Output Norms (SION). (iii) Import of drugs from unregistered sources shall have pre-import condition. 4.14 Details of Duties exempted 9[Imports under Advance Authorisation .....

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from either the 10[******] 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, can be disposed off on payment of applicable duty even before fulfillment of export obligation. 4.17 Validity Period for Import and its Extension Validity period for import under Advance Authorisation shall be as prescribed in Handbook of Procedures. 4.18 Importability/Export ability of items that are Prohibited/Restricted/ STE (i) No export or import of an item shall be allowed under Advance Authorisation / DFIA if the item is prohibited for exports or imports respectively. Export of a prohibited item may be allowed under Advance Authorisation provided it is separately so notified, subject to the conditions given therein. (ii) Items reserved for imports by STEs cannot be imported against Advance Authorisation / DFIA. However, those items can be procured from STEs against ARO or Invalidation letter. STEs are also allowed to sell goods on High Sea Sale basis to holders of Advance Authorisation / DFIA holder. STEs are also p .....

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with validity of Authorisation. 4.21 Currency for Realisation of Export Proceeds. (i) Export proceeds shall be realized in freely convertible currency except otherwise specified. Provisions regarding realisation and non realisation of export proceeds are given in paragraph 2.52, 2.53 and 2.54 of FTP. (ii) Deleted (iii) Export to SEZ Units shall be taken into account for discharge of export obligation provided payment is realised from Foreign Currency Account of the SEZ unit. (iv) Export to SEZ Developers / Co-developers can also be taken into account for discharge of export obligation even if payment is realised in Indian Rupees. (v) Authorisation holder needs to file Bill of Export for export to SEZ unit / developer / co-developer in accordance with the procedures given in SEZ Rules, 2006. 4.22 Export Obligation Period and its Extension Period for fulfilment of export obligation and its extension under Advance Authorisation shall be as prescribed in Handbook of Procedures. 4.23 Deleted 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 f .....

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achieved. 4.29 Validity &Transferability of DFIA (i) Applicant shall file online application to Regional Authority concerned before starting export under DFIA. (ii) Export shall be completed within 12 months from the date of online filing of application and generation of file number. (iii) While doing export/supply, applicant shall indicate file number on the export /supply documents viz. Shipping Bill / / Bill of Export / Tax invoice for supply prescribed under GST rules. (iv) In terms of Para 4.12 of FTP, Wherever SION permits use of either (a) a generic input or (b) alternative input, the specific input together with quantity [which has been used in manufacturing the export product] should be indicated / endorsed in the relevant Shipping Bill / Bill of Export / Tax invoice for supply prescribed under GST rules . Only such inputs may be permitted for import in the authorisation in proportion to the quantity of these inputs actually used/consumed in production, within overall quantity against such generic input/alternative input. (v) 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 input .....

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whether plain or studded, containing gold of 8 carats and above up to maximum limit of 22 carats. Gold religious idols (only gods and goddess) of 8 carats and above (upto 24 carats) subject to the following conditions: i) Exports would be subject to 100% examination by the Approved Government Valuer. ii) Foreign remittance has to be realised within a period of 3 months from the date of export. iii) Exporters must submit confirmed export order before effecting export. iv) Distinction must be made between a religious idol and simply moulded gold article/ idol. v) Exports may be allowed only by actual manufacturers of such idols. The Findings like posts, push backs, locks which help in collating the jewellery pieces together, containing gold of 3 carats and above up to a maximum limit of 22 carats] (ii) 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; (iii) Platinum jewellery including partly processed jewellery and articles including medallions and coins (excluding legal tender coins and any engineering goods) .....

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after deducting the value of gold/ silver/ platinum including admissible wastage. The scale of replenishment and the item of import will be as prescribed in Appendix 4G. 4.36 Replenishment Authorisation for Consumables (i) Replenishment Authorisation for duty free (excluding Integrated Tax and Compensation cess leviable under Section 3(7) and 3(9) of Customs Tariff Act)import of Consumables, Tools and other items namely, Tags and labels, Security censor on card, Staple wire, Poly bag (as notified by Customs) for Jewellery made out of precious metals (other than Gold & Platinum) equal to 2% and for Cut and Polished Diamonds and Jewellery made out of Gold and Platinum equal to 1% of FOB value of exports of the preceding year, may be issued on production of Chartered Accountant Certificate indicating the export performance. However, in case of Rhodium finished Silver jewellery, entitlement will be 3% of FOB value of exports of such jewellery. This Authorisation shall be non-transferable and subject to actual user condition. (ii) Application for import of consumables as given above shall be filed online to the concerned Regional Authority in ANF 4H. 4.37 Advance Authorisation for P .....

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rt gold as input only for the purpose of manufacture and export by themselves during the remaining validity period of the Nominated Agency certificate. (iv) Reserve Bank of India can authorize any bank as Nominated Agency. (iv) Procedure for import of precious metal by Nominated Agency (other than those authorized by Reserve Bank of India 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 Hand Book of Procedures. (v) A bank authorised by Reserve Bank of India is allowed export of gold scrap for refining and import standard gold bars as per Reserve Bank of India guidelines. 4.42 Import of Diamonds for Certification / Grading & Re- export Following agencies are permitted to import diamonds to their laboratories without any import duty, for the purpose of certification / grading reports, with a condition that the same should be re-exported with the certification/grading reports, as per the procedure laid down in Hand Book of Procedures: (1) Gemological Institute of America (GIA), Mumbai, Maharashtra. (2) Indian Diamond Institute, Surat, Gujarat, India. (3) International Institute .....

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ii) Personal carriage of gold / silver / platinum jewellery, precious, semi-precious stones, beads and articles and export of branded jewellery is also permitted, subject to conditions as in Handbook of Procedures. 4.47 Personal Carriage of Export /Import Parcels Personal carriage of gems and jewellery export parcels by foreign bound passengers and import parcels by an Indian importer/foreign national may be permitted as per the Handbook of Procedures. 4.48 Export by Post Export of jewellery through Foreign Post Office including via Speed Post is allowed. The jewellery parcel shall not exceed 20 kgs by weight. 4.49 Private / Public Bonded Warehouse Private / Public Bonded Warehouses may be set up in SEZ/DTA for import and re-export of cut and polished diamonds, cut and polished coloured gemstones, uncut & unset precious & semi-precious stones, subject to achievement of minimum value addition of 5% by DTA units. 4.49(A) Import, auction/sale and re-export of rough diamonds by entities, as notified vide RBI Notification 116 of 1st April, 2014, as amended from time to time, on consignment or outright basis, will be permitted in Special Notified Zone (SNZ) administered by the op .....

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************* Notes:- 1. Substituted vide Notification No. 57/2015-2020 - Dated 28-03-2018, before it was read as, "(c) Duty Free Import Authorisation Scheme shall not be available for import of raw sugar." 2. Substituted vide Notification No. 57/2015-2020 - Dated 28-03-2018, before it was read as, "(iv) No Duty Free Import Authorisation shall be issued for an input which is subjected to pre-import condition or where SION prescribes Actual User condition or Appendix-4J prescribes pre import condition for such an input." 3. Substituted vide Notification No. 13/2015-2020 dated 20-06-2018 before it was read as, "Separate DFIA shall be issued for each SION and each port." 4. Substituted vide Notification No. 13/2015-2020 dated 20-06-2018 before it was read as, "Exports under DFIA shall be made from a single port as mentioned in paragraph 4.37 of Handbook of Procedures." 5. Substituted vide Notification No. 54/2015-2020 dated 22-03-2018 before it was read as "31.03.2018" 6. Substituted vide Notification No. 35/2015-2020 dated 26-09-2018 before it was read as "5[01.10.2018]" 7. Substituted vide Notification No 43/2015-2020 dated .....

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