Policy

2.1

The Policy relating to the general provisions regarding exports and imports is given in Chapter-2 of the Policy.

Countries of Imports/Exports

2.2

Unless otherwise specifically provided, import/ export will be valid from/to any country. However, import/exports of arms and related material from/to Iraq shall be prohibited.

The above provisions shall, however, be subject to all conditionality, or requirement of licence, or permission, as may be required under Schedule II of ITC (HS).

Application Fee

2.3

Unless otherwise exempted, specified fee shall be paid for making an application under any provision of the Policy and this Handbook. The scale of fee, mode of payment, procedure for refund of fee and the categories of persons exempted from the payment of fee are contained in Appendix-29

Territorial Jurisdiction of Licensing Authorities

2.4

Every application, unless otherwise specified, shall be submitted to the licensing authority concerned, as per the territorial jurisdiction of the licensing authorities indicated in Appendix-24

Filing of Application

2.5

Every application for an Import/Export licence/ certificate/permission or any other purpose should be complete in all respects as required under the relevant provisions of the Policy/Procedures and shall be signed by the applicant as defined in paragraph 9.9 of the Policy.

An incomplete application is liable to be rejected giving specific reason for rejection. However in case of manual applications, the applicant would furnish a soft copy of the application in MS word format.

Profile of Importer/ Exporter

2.6

Each importer/exporter shall be required to file importer/exporter profile once with the licensing authority in the form given in Appendix-2. Licensing authority shall enter the information furnished in Appendix-2 in their database so as to dispense with the need for asking the repetitive information. In case of any change in the information given in Appendix-2, importer/exporter shall intimate the same to the licensing authority.

Self Addressed Stamped Envelope

2.7

The applicant shall furnish a self addressed envelope of 40 x 15 cm with postal stamp affixed on the envelope as follows for all documents required to be sent by Speed Post:

(i)

The Department of Electronics, for import of computer and computer based systems;

(ii)

The Department of Industrial Policy and Promotion, Technical Support Wing (TSW), for organised sector units registered under it, except for import of computers and computer based systems;

(iii)

The Ministry of Defence, for defence related items;

(iv)

The Director General of Foreign Trade for small scale industries and entities not covered above as well as on behalf of any of the above;

(v)

The Embassy of India, Washington, DC, on behalf of any of the above.

A request for an import certificate shall be made in the form given in Appendix-7. The import certificate in the form given in Annexure to Appendix-7 may be issued by the ICIA directly to the importer with a copy to (i) Ministry of External Affairs (AMS Section), New Delhi, (ii) Department of Electronics, New Delhi; and (iii) Directorate General of Foreign Trade, New Delhi.

However, this import certificate will not be regarded as a substitute for an import licence/certificate/ permission in respect of the items mentioned as restricted in ITC(HS) and an import licence/certificate/permission will have to be obtained wherever required for such items.

Validity Of Import Licence/Certificate/ Permissions/ CCPS

2.12

The validity of import licence/certificate/ permission from the date of issue of licence/ certificate/ permission shall be as follows:

Execution of Bank Guarantee/ Legal Undertaking for Advance Licence and EPCG

2.20

In cases of direct import before clearance of goods through customs, the licence holder shall execute a legal undertaking (LUT)/Bank Guarantee(BG) with the customs authorities in the manner as prescribed by them.

For cases of direct imports, the Licencing Authority shall endorse the following condition on the licence :

"Bank Guarantee/ LUT as applicable to be executed as per relevant Customs Notification/ Circular"

However, in case of indigenous sourcing, the licence/certificate/permission holder shall furnish Bank Guarantee/LUT to the licensing authority as prescribed below before sourcing the material from the nominated agencies or indigenous supplier:-

S. No

Category of Exporter

Relevant provisions of

Bank Guarantee/ LUT

1

All Status holders (both merchandise exporter and service providers)/Public Sector Undertaking (PSUs) .

Legal Undertaking (LUT).

2

Manufacturer exporter

1. Registered with Central Excise authority and
2. Having a minimum export turn- over of Rs.1 Crore and above in the preceding year. and
3. Having exported during the previous two financial years.

Legal Undertaking (LUT).

3

Manufacturer Exporter

1. Registered with Central Excise Authority and
2. Having paid Central Excise Duty of Rs.1 Crore or more during the preceding financial year.

The exporter must submit a Certificate issued by Jurisdictional Superintendent of Central Excise where the factory is located validating clause (b) above.

Legal Undertaking (LUT).

4

All exporters

1. having an export turnover of at least Rupees 5 crore in the preceding licencing year and
2. have a good track record and three years of export performance

Legal Undertaking (LUT).

5

Other Manufacturer Exporter not covered under 1, 2 3 & 4 above( except Proprietorships and Partnership firms)

1. exporting for last 3 years, or
2. exporting in any of the last 3 years and satisfying the following conditions:

Registered with Excise Authorities,

Registered with State Sales Tax Authorities;

Shall be required to furnish:

1. A Central Excise certificate certifying preceding years exports as per customs Circular No.74/2003 dated 21.8.2003, and

Bond supported by Bank Guarantee to the extent of 25% of duty saved on excise and education cess, if applicable with 15% interest.

6

Manufacturing companies (as distinguished from Proprietorship and Partnership firm, who may also be manufacturers) having not exported in each of the preceding three licencing years but fulfilled the following criterion:

1. The company is registered with Central Excise Authorities and has paid Central Excise duty (unless exempted); and
2. The company is registered with State Sales Tax Authorities and has paid sales tax (unless exempted); and
3. The company furnishes copy of their audited balance sheet; and the minimum investment in plant and machinery must be Rs 50 lakhs.

Bond supported by Bank Guarantee to the extent of 25% of duty saved on excise duty and education cess, if applicable with 15% interest.

7

Merchant Exporter, all types of Proprietorship and Partnership firms (Other than Status Holders/ PSUs and category 4 above)

Bond supported by Bank Guarantee to the extent of 100% of the duty saved on excise and education cess if applicable with 15% interest.

8

Service providers other than those in category 1and 4 above.

Bond supported by Bank Guarantee to the extent of 100% of the duty saved on excise and education cess if applicable with 15% interest.

However, Manufacturer / Merchant Exporters falling under any of the following two categories based on risk profile of the exporter are required to execute bond supported by Bank Guarantee to the extent of 100% of the duty saved amount on excise and education cess if applicable with 15% interest. This can be prescribed by the Head of the office not being below the rank of Deputy Director General of Foreign Trade by recording the reasons in writing.

1. Have come under the adverse notice of Customs/ DGFT / Central Excise for serious irregularities;

In cases where the Excise Duty is nil on the items of indigenous procurement, the Bank Guarantee furnished would be for 25% of the basic Customs Duty with 15% interest on the same product. The Bank Guarantee and LUT should be valid as per the terms and conditions incorporated in the Appendix-21 & 21A respectively. The validity of the Bank Guarantee/LUT is required to be extended in case of extension in export obligation period. Specific endorsement to this effect shall be made in the licence by the licencing authority.

In respect of categories 3 , 4 & 5 above, if the exporter has not exported for all the 3 preceding years, 25% Bank Guarantee condition shall be imposed on the duty saved amount provided the CIF value does not exceed 200% of the domestic turnover or 200% of FOB/FOR value of supplies, whichever is higher. Licence beyond 200% entitlement shall be subject to 100% BG on the duty saved amount for the CIF value exceeding 200% entitlement. However the entitlement may be re-credited on production of documentary evidence showing fulfillment of export obligation and realization of export/ supply proceed.

In all the above cases, the licencee is required to furnish declaration to the effect that they have not been penalized under the Customs Act, Excise Act, Foreign Trade (Development & Regulation) Act, 1992 and FEMA/FERA.

In respect of categories at S No. 2 and 4, the licencee would be required to submit the Export Performance Certificate issued by a Chartered Accountant as per Appendix 23.

However, for import/domestic procurement of car under EPCG scheme, 100% Bank Guarantee will be required to be furnished except in case of status holders/ PSUs who will furnish Bank Guarantee/LUT as per aforesaid conditions

Bank Guarantee exemption/relaxation as mentioned above shall also be available in respect of past licences where licence holder had earlier filed Bank Guarantee but as on date the licence holder is entitled for Bank Guarantee exemption.

In case, the firm has already executed BG/ LUT for the full value of the licence/ certificate/ permission covering the items indigenously procured ,to the Customs and furnishes proof of the same, no BG/ LUT shall be required to be executed with the licencing authority.

Corporate

Guarantee

2.20.1

A Status holder or a PSU may also submit Corporate Guarantee in lieu of Bank Guarantee/LUT in terms of the provisions of relevant Customs Circular in this regard. In case of a group company, if one company of a Group is a status holder, Corporate Guarantee may be given for another company by this company, which is not a status holder.

Certificate of Origin

2.21

Certificate of Origin is the instrument to establish evidence on the origin of goods imported into any country. There are two categories of Certificate of Origin viz. (1) Preferential and (2) Non preferential.

Preferential

2.21.1

The preferential arrangement/schemes under which India is receiving tariff preferences for its exports are Generalised System of Preferences (GSP), Global System Of Trade Preferences (GSTP), SAARC Preferential Trading Agreement (SAPTA), Bangkok Agreement , India–Srilanka Free Trade Agreement (ISLFTA) and Indo- Thailand Free Trade Agreement. These arrangements/ agreements prescribe Rules of origin which have to be fulfilled for the exports to be eligible for the tariff preference.

The authorised agencies shall provide services relating to issuance of certificate of origin, including details regarding the rules of origin, list of items covered by an agreement, extent of tariff preference, verification and certification of eligibility etc. Export Inspection Council ( EIC) is the sole agency authorised to print blank certificates. The authorised agencies may charge a fee, as approved by Ministry of Commerce and Industry, for services rendered.

Generalised System of Preferences (GSP)

(a) GSP is a non contractual instrument by which industrialized (developed) countries unilaterally and on the basis of non reciprocity extend tariff concessions to developing countries. The following countries extend tariff preferences under their GSP Scheme.

United States,

European Union,

Canada,

Australia (only to LDCs)

New Zealand

Japan

Norway

Switzerland

Bulgaria

Belarus

Russia

GSP schemes of these countries details the sectors/ products and tariff lines under which these benefits are available, besides the conditions and the procedures governing the benefits. These schemes are renewed and modified from time to time. Normally the Customs of GSP offering countries require information in Form ‘A’ (prescribed for GSP Rules Of Origin) duly filled by the exporters of the beneficiary countries and certified by authorised agencies. List of agencies authorised to issue GSP Certificate of Origin is given in Appendix-35.

Global System of Trade Preference (GSTP)

(b) Under the agreement establishing Global System of Trade Preference (GSTP), tariff concessions are exchanged among developing countries, who have signed the agreement. Presently, there are 46 member countries of GSTP and India has exchanged tariff concessions with 12 countries on a limited number of products. Export Inspection Council (EIC) is the sole agency authorised to issue Certificate of Origin under GSTP.

SAARC Preferential Trading Agreement (SAPTA)

(c) The Agreement establishing SAPTA was signed by seven SAARC members namely India, Pakistan, Nepal, Bhutan, Bangladesh, Sri Lanka and Maldives in 1993 and came into operation in 1995. Four rounds of trade negotiations have been completed and more than 3000 tariff lines are under tariff concessions among the SAARC countries. The list of agencies, which are authorised to issue Certificate of Origin under SAPTA are notified under Appendix – 35A.

Bangkok Agreement

(d) The Bangkok agreement is a preferential trading arrangement designed to liberalise and expand trade in goods progressively in the Economic and Social Commission for Asia and Pacific (ESCAP) region through liberalization of tariff and non tariff barriers. At present , Bangladesh, Sri Lanka, South Korea, India and China are exchanging tariff concessions. The agencies authorised to issue Certificate of Origin under Bangkok agreement are listed in Appendix – 35A.

India-Sri Lanka Free Trade Agreement (ISLFTA)

(e) A Free Trade Agreement (FTA) between India and Sri Lanka was signed on 20^th December, 1998. The agreement was operationalised in March, 2000 following notification of the required Customs tariff concessions by the Government of Sri Lanka and India in February, and March, 2000 respectively. Export Inspection Council is the sole agency to issue the Certificate of Origin under ISLFTA.

India Afghanistan Preferential Trade Agreement

(f) A Preferential Trade Agreement between the Transitional Islamic State of Afghanistan and Republic of India was signed on 6th March, 2003 and was operationalised with the issuance of the Customs Notification No 76/2003 dated 13th May, 2003. Export Inspection Council is the sole agency to issue the Certificate of Origin under India Afghanistan Preferential Trade Agreement .

Indo – Thailand Framework Agreement for Free Trade Area

(g) The Protocol to implement the Early Harvest Scheme (EHS) under the Framework Agreement for the Free Trade Area (FTA) between India and Thailand was signed on 30^th August, 2004. The tariff concessions on 82 products under the EHS begins from 1^st September, 2004. Export Inspection Council would be the sole agency to issue the Certificate of Origin for items under the EHS.

Non Preferential

2.21.2

The Government has also nominated certain authorised agencies to issue Non Preferential Certificate of Origin in accordance with Article II of International Convention Relating to Simplification of Customs formalities, 1923. These Certificates of Origin evidence the origin of goods and do not bestow any right to preferential tariffs. The list of these agencies is provided in Appendix – 35B.

All the exporters who are required to submit Certificate of Origin (Non Preferential) would have to apply to any of the agencies enlisted in Appendix–35B with the following documents:

(a)

Details of quantum/origin of the inputs/ consumables used in the export product.

(b)

Two copies of invoices.

(c)

Packing list in duplicate for the concerned invoice.

(d)

Fee not exceeding Rs.100 per certificate as may be prescribed by the concerned agency.

The agency would ensure that the goods are of Indian origin as per the general principles governing the rules of origin before granting the Certificate of Origin(non preferential). The Certificate would be issued as per the Format of Certificate of Origin (Non Preferential) given in Annexure-II to Appendix–35B. It should be ensured that no correction/re-type is made on the certificate.

In the event of any agency desirous of being enlisted in Appendix-35-B, they shall submit the following documents to the office of the Director General of Foreign Trade through the Jurisdictional Regional Office of the DGFT:

a)

Details on the history, activities, membership, awards etc. of the agency.

b)

Notarised Declaration cum Undertaking as per Annexure I to Appendix 35 B on a stamp paper (Minimum Rupees two)

A copy of the same may also be endorsed to the RMTR Division of the Department of Commerce .

Automatic Licence/ Certificate/ Permission

2.22

The status holders shall be issued licence/ certificate/ permissions automatically within the stipulated time period. Deficiency, if any, shall be informed in the covering letter which shall be required to be rectified by the status holders within 10 days from the date of communication of deficiency.

Submission of Certified Copies of Documents

2.23

Wherever the original documents have been submitted to a different licensing authority/ nominated agencies or to a different division of the same licensing authority, the applicant can furnish photocopy of the documents duly certified by him in lieu of the original.

Advance Payment

2.24

In case, payment is received in advance and export/ deemed exports takes place subsequently, the application for a licence/certificate/permission shall be filed within specific period following the month during which the exports/deemed exports are made, unless otherwise specified

Payment through ECGC cover

2.25.1

In cases where the export has been completed but the payment has not been realised from the buyer, such exports shall be taken into account for the purpose of benefits under the Policy provided the payment has been realised by the Indian exporter through ECGC cover.

Payment through General Insurance

2.25.2

In cases where exports have been made and payment realized through the General Insurance Cover on account of transit loss or other circumstances, the amount of the insurance cover paid would be treated as payment realized on account of exports under the various export promotion schemes.

Export by post

2.26

In case of export by post, the exporter shall submit the following documents in lieu of documents prescribed for export by sea/air.

1)

Bank Certificate of Export and Realisation as given in Appendix-22.

2)

Relevant postal receipt

3)

Invoice duly attested by the Customs

 Import/ Export through Courier Service

 2.26.1

Imports/Exports through a registered courier service is permitted as per the Notification issued by the Department of Revenue. However, importability/ exportability of such items shall be regulated in accordance with the Policy.

Direct negotiation of export documents

2.26.2

In cases where the exporter directly negotiates the document ( not through the authorised dealer) with the permission of the RBI, he is required to submit the following documents for availing of the benefits under the export promotion schemes:

a.

Permission from RBI allowing direct negotiation of documents (however this is not required for status holders who have been granted a general permission),

b.

Copy of the Foreign Inward Remittance Certificate (FIRC) as per Form 10-H of the Income Tax department in lieu of the BRC and

c.

Statement giving details of the shipping bills/ invoice against which the FIRC was issued.

Import/Export of Samples

2.27

No licence/certificate/permission shall be required for Imports of bonafide technical and trade samples of items mentioned as restricted in ITC(HS) except vegetable seeds, bees and new drugs by any importer. However, samples of tea not exceeding Rs.2000 (CIF) in one consignment shall be allowed without a licence/certificate/permission by any person connected with Tea industry.

Duty free import of samples upto Rs 60000 for all exporters barring those in the gems and jewellery sector and Rs 100000 for those in the gems and jewellery sector shall be allowed as per the terms and conditions of Customs notification.

Exports of bonafide trade and technical samples of freely exportable item shall be allowed without any limit.

Import under Lease Financing

2.28

Permission of the licensing authority is not required for import of capital goods under lease financing. However, the condition of actual user or licence/ certificate/ permission, wherever required under the Policy or this Handbook, shall be applicable in case of import of capital goods under such lease financing.

The facility shall also be available under EPCG Scheme, EOU/SEZ scheme. The domestic supplier of capital goods to eligible categories of deemed exports shall be eligible for the benefits of deemed exports as given in paragraph 8.3 of the Policy even in such cases where the supplies are under lease financing.

Exhibits Required For National And International Exhibitions Or Fairs And Demonstration

2.29

Import/export of exhibits, including construction and decorative materials required for the temporary stands of the foreign/ Indian exhibitors at the exhibitions, fair or similar show or display for a period of six months on re-export/re-import basis, shall be allowed without a licence/certificate/ permission on submission of a certificate from an officer of a rank not below that of an Under Secretary/Deputy Director General of Foreign Trade to the Government of India in the Department of Commerce/ Directorate General of Foreign Trade or an officer of the Indian Trade Promotion Organization duly authorised by its Chairman in this behalf, to the effect that such exhibition, fair or similar show or display, as the case may be,

(i)

has been approved or sponsored by the Government of India in the Department of Commerce or the India Trade Promotion Organization; and

(ii)

is being held in public interest.

Extension beyond six months for re-export/re-import will be considered by the Customs authorities on merits. Consumables such as paints, printed material, pamphlets, literature etc. pertaining to the exhibits need not be re-exported/re-imported.

Import Policy

2.30

The Policy relating to the general provisions regarding import of capital goods, raw materials, intermediates, components, consumables, spares, parts, accessories, instruments and other goods is given in Chapter 2 of the Policy.

General Procedure for Licensing of Restricted Goods

2.31

Wherever an import licence/certificate/permission, including Customs Clearance Permit (CCP), is required under the Policy, the procedure contained in this chapter shall be applicable.

Import of Second hand Goods/Waste Scrap/ Seconds/ Rags

2.32

The following items may be imported without a licence/ certificate/ permission.

(i)

Any form of metallic waste, scrap, seconds and defectives, other than those which are of a value below the value specified for any such items by a notification issued in this behalf, and excluding hazardous, toxic waste, radio active contaminated waste/ scrap containing radio active material;

(ii)

Woolens rags/ synthetic rags/ shoddy wool in completely mutilated form subject to the condition that mutilation must conform to the requirements as specified by the customs authorities.

(iii)

PET bottle/waste

(iv)

Import of all types of ships may be made without a licence/certificate/permission on the basis of guidelines issued by Ministry of Shipping and as per the age/residual life norms prescribed by the Ministry of Shipping.

Provided in case of import of metal scrap originating from a country affected by war, the exporter shall furnish the following documents to the Customs at the time of clearance of goods:

(I)

Pre-shipment inspection certificate as per the format in Annexure I to Appendix 8 from any of the Inspection & Certification agencies given in Appendix-28 to the effect that:

a)

The consignment does not contain any type of arms, ammunition, mines, shells, cartridges, radio active contaminated or any other explosive material in any form either used or otherwise.

b)

the imported item(s) is actually a metallic waste/scrap/ seconds/defective as per the internationally accepted parameters for such a classification.

(II)

A copy of the contract between the importer and the exporter stipulating that the consignment does not contain any type of arms, ammunition, mines, shells, cartridges, radio active contaminated, or any other explosive material in any form either used or otherwise.

In case any agency wishes to be enlisted under Appendix 28, they may furnish an application to the office of the Director General of Foreign Trade with the following documents:

a)

A brief on the activities of the agency, its history, membership, organisational structure, manpower etc.

b)

Infrastructural setup, logistics, testing labs etc for carrying out the inspection of metallic scrap.

c)

List of companies/ agencies for which testing has been carried out.

DGFT will review the performance of the Inspection and Certification Agencies in Appendix 28 on a regular basis.

Import of Second Hand Capital Goods

2.33

Import of second hand capital goods including refurbished/reconditioned spares, shall be allowed freely, subject to conditions for the following categories:

The Import of second hand computers including personal computers and laptops are restricted for imports.

The import of refurbished/ reconditioned spares will be allowed on production of a Chartered Engineer certificate that such spares have a residual life not less than 80% of the life of the original spare.

2.33.1

Notwithstanding the provisions of Para 2.33 above, second hand computers, laptops and computer peripherals including printer, plotter, scanner, monitor, keyboard and storage units can be imported freely as donations by the following category of donees:

(i)

School run by Central or State Government or a local body,

(ii)

Educational Institution run on non- commercial basis by any organization

(iii)

Registered Charitable Hospital

(iv)

Public Library

(v)

Public funded Research and Development Establishment

(vi)

Community Information Centre run by the Central or State Government or local bodies

(vii)

Adult Education Centre run by the Central or State Government or a local body

(viii)

Organization of the Central or State Government or a Union Territory

The imports under this sub Para would be subject to the condition that the goods shall not be used for any commercial purpose, is non transferable and complies with all the terms and conditions of the relevant Customs Rules and Regulations.

 2.33A

Customs or any other Central or State Government authority may avail of the services of the Inspection and Certification Agencies in Appendix 28 of the Handbook, for certifying both the residual life as well as the valuation/ purchase price of the capital good.

Import of Ammunition by Licensed Arms Dealers

2.34

Import of following types of ammunition are allowed against a licence/certificate/permission by licensed arms dealers subject to the conditions as may be specified:

(i)

Shotgun Cartridges 28 bore;

(ii)

Revolver Cartridges of .450, .455 and .45 bores;

(iii)

Pistol Cartridges of .25, .30 Mauser, .450 and .45 bores;

(iv)

Rifle Cartridges of 6.5 mm, .22 savage, .22 Hornet, 300 Sherwood, 32/40, .256, .275, .280, 7m/m Mauser, 7 m/m Man Schoener, 9m/m Mauser, 9 m/m Man Schoener, 8x57, 8x57S, 9.3 m/m, 9.5 m/m, .375 Magnum, .405, .30.06, .270, .30/30 Winch, .318, .33 Winch,.275 Mag., .350 Mag., 400/350, .369 Purdey, .450/400, .470, .32 Win, .458 Win, .380 Rook, .220 Swift and .44 Win. bores.

An import licence/certificate/permission shall be issued at 5% of the value of the annual average sales turnover of ammunition (whether indigenous or imported) during the preceding three licensing years subject to a minimum of Rs. 2000.

An application for grant of a licence/ certificate/ permission for items listed in paragraph 2.34 above may be made to the licensing authority in the form given in Appendix-8 alongwith the documents prescribed therein.

Restricted Items Required By Hotels, Restaurants, Travel Agents, Tour Operators And Other Specified Categories

2.35

Items mentioned as restricted for imports in ITC(HS) required by hotels, restaurants, travel agents and tour operators may be allowed against a licence/ certificate/ permission. Import licence/ certificate/ permission shall be granted on the recommendation of the Director General, Tourism, Government of India.

2.35.1

Hotels, including tourist hotels, recognised by the Director General of Tourism, Government of India or a State Government shall be entitled to import licence/ certificate/permissions upto a value of 25% of the foreign exchange earned by them from foreign tourists during the preceding licensing year.

Such licence/certificate/ permissions shall be granted for the import of essential goods related to the hotel and tourism industry.

2.35.2

Travel agents, tour operators, restaurants, and tourist transport operators and other units for tourism, like adventure/wildlife and convention units, recognized by the Director General of Tourism, Government of India, shall be entitled to import licence/ certificate/ permissions up to a value of 10% of the foreign exchange earned by them during the preceding licensing year.

Such licence/ certificate/ permissions shall be granted for the import of essential goods which are restricted for imports related to the travel and tourism industry, including office and other equipment required for their own professional use.

2.35.3

The import entitlement under paragraphs 2.35.1 and 2.35.2 of any one licensing year can be carried forward, either in full or in part, and added to the import entitlement of the two succeeding licensing years.

2.35.4

The import licence/certificate/permission granted under paragraphs 2.35.1 and 2.35.2 shall not be transferable. However, transferability of such licence/ certificate/ permission granted to hotels/ restaurants/ travel agents/ tour operators may be allowed within their respective groups or to managed hotels as defined in Chapter 9 of Foreign Trade Policy.

2.35.5

The goods imported against such licence/ certificate/ permission shall not be transferred to anyone within a period of 2 years from the date of their import without the prior permission of the Director General of Foreign Trade.

 No permission for transfer will be required in case the imported goods are re-exported. However, the re-export shall be subject to all conditionality, or requirement of licence, or permission, as may be required under Schedule II of ITC(HS) Classification

2.35.6

An application for grant of a licence/ certificate/ permission under paragraphs 2.35.1 and 2.35.2 may be made in the form given in Appendix-8 to the Director General of Foreign Trade through Director of Tourism, Government of India who will forward the application to the licensing authority concerned along with the recommendations on the import entitlement and the goods to be imported.

Import of Other Restricted Items

2.36

ITC(HS) contains the list of restricted items. An application for import of such items may be made, in the form given in Appendix-8 to the Director General of Foreign Trade alongwith documents prescribed therein.

EXIM Facilitation Committee

2.37

Restricted item licence/certificate/permission may be granted by the Director General of Foreign Trade or any other licensing authority authorised by him in this behalf. The DGFT/ Licensing authority may take the assistance and advice of a facilitation committee.

The Facilitation Committee will consist of representatives of technical authorities and Departments/ Ministries concerned.

Gifts of Consumer or Other Goods

2.38

In terms of the provisions contained in paragraph 2.19 of the Policy, an application for grant of Customs Clearance Permit for import as gifts of items appearing as restricted for imports in ITC(HS) shall be made to the Director General of Foreign Trade in the form given in Appendix-8 along with documents prescribed therein.

However, where the recipient of a gift is a charitable, religious or an educational institution registered under a law relating to the registration of societies or trusts or otherwise approved by the Central or a State Government and the gift sought to be imported has been exempted from payment of customs duty by the Ministry of Finance, such import shall be allowed by the customs authorities without a Customs Clearance Permit.

Import under Govt. to Govt. Agreements

2.39

Import of goods under Government to Government agreements may be allowed without a licence/ certificate/permission or Customs Clearance Permit on production of necessary evidence to the satisfaction of the Customs authorities

Import of Cheque Books/ Ticket Forms etc.

2.40

Indian branches of foreign banks, insurance companies and travel agencies may import cheque books, bank draft forms and travellers cheque forms without a Customs Clearance Permit. Similarly, airlines/shipping companies operating in India, including persons authorised by such airlines/shipping companies, may import passenger ticket forms without a Customs Clearance Permit.

Import of Reconditioned/ Second Hand Aircraft Spares

2.41

Air India, Indian Airlines, Vayudoot, Pawan Hans Ltd. and scheduled domestic private airlines, private sector/public sector companies and State Governments operating executive/ training aircraft or those engaged in the aerial spraying of crops and non scheduled airlines and charter service operators will be eligible to import, without a licence/ certificate/permission, reconditioned/ second hand aircraft spares on the recommendation of the Director General of Civil Aviation, Government of India.

Foreign airlines shall also be eligible to import without a licence/ certificate/ permission, reconditioned/second hand aircraft spares on the recommendation of the Director General of Civil Aviation, Government of India.

Import of Replacement Goods

2.42

Goods or parts thereof on being imported and found defective or otherwise unfit for use or which have been damaged after import may be exported without a licence/ certificate/ permission, and goods in replacement thereof may be supplied free of charge by the foreign suppliers or imported against a marine insurance or marine-cum-erection insurance claim settled by an insurance company. Such goods shall be allowed clearance by the customs authorities without an import licence/certificate/permission provided that:

(a)

The shipment of replacement goods is made within 24 months from the date of clearance of the previously imported goods through the Customs or within the guarantee period in the case of machines or parts thereof where such period is more than 24 months; and

(b)

No remittance shall be allowed except for payment of insurance and freight charges where the replacement of goods by foreign suppliers is subject to payment of insurance and/or freight by the importer and documentary evidence to this effect is produced at the time of making the remittance.

The importer shall also have the option to claim refund of payment, if any, already made to the foreign supplier, instead of obtaining replacement of goods referred to above.

2.42.1

In such cases where the goods have been found short-shipped, short-landed or lost in transit prior to actual import and/or detected as such at the time of customs clearance, import of replacement goods will be permitted on the strength of the certificate issued by the customs authorities without an import licence/ certificate/ permission.

This procedure shall also apply to cases in which short-shipment of goods is certified by the foreign supplier and he has agreed to replace the goods free of cost.

2.42.2

Cases not covered by the above provisions will be considered on merits by the DGFT for grant of licence/certificate/ permissions for replacement of goods for which an application may be made in the form given in Appendix-8.

Transfer of Imported Goods

2.43

Goods, which are importable without restriction, can be transferred by sale or otherwise by the importer freely. Transfer of imported goods, which are subject to Actual User condition under the Policy and have become surplus to the needs of the Actual User, shall be made only with the prior permission of the licensing authority concerned. The following information alongwith supporting documents shall be furnished with the request for grant of permission for transfer, to the licensing authority concerned:

(i)

Reasons for transfer of imported material;

(ii)

Name, address, IEC number and industrial licence/ certificate/permission/registration, if any, of the transferee;

(iii)

Description, quantity and value of the goods imported and those sought to be transferred;

(iv)

Copies of import licence/ certificate/ permission and bills of entry relating to the imports made;

(v)

Terms and conditions of the transfer as agreed upon between buyer and the seller.

2.43.1

Prior permission of the licensing authority shall not, however, be necessary for transfer or disposal of goods, which were imported with Actual User condition provided such goods are freely importable without Actual User condition on the date of transfer.

2.43.2

Prior permission of the licensing authority shall also not be required for transfer or disposal of imported goods after a period of two years from the date of import. However, transfer of imported firearms by the importer/licencee shall be permitted only after 10 years of the date of import with the approval of the DGFT.

Sale of Exhibits

2.44

(i)

Sale of exhibits of restricted items, mentioned in ITC(HS), imported for an international exhibition/ fair organised/ approved/ sponsored by the India Trade Promotion Organisation (ITPO) may also be made, without a licence/certificate/permission, within the bond period allowed for re-export, on payment of the applicable customs duties, subject to a ceiling limit of Rs.5 lakhs (CIF) for such exhibits for each exhibitor.

However, sale of exhibits of items, which were freely imported shall be made, without a licence/ certificate/ permission, within the bond period allowed for re-export on payment of applicable customs duties.

(ii)

If goods brought for exhibition are not re-exported or sold within the bond period due to circumstances beyond the control of the importer, the customs authorities may allow extension of the bond period on merits.

Import of Overseas Office Equipment

2.45

On the winding up of overseas offices, set up with the approval of the Reserve Bank of India, used office equipment and other items may be imported without a licence/ certificate/ permission.

Labels, Price Tags And Like Articles For Export Products

2.46

Supplies, made by foreign buyers or procured by the exporters on the advice of foreign buyers, of labels, price tags, hangers sizers, PVC boxes, inlay cards, printed bags, stickers and trimming materials like buttons, belts shoulder pads, buckles, eyelets, hooks and eyes and rivets to be attached to the goods against specific orders placed by foreign buyers on Indian exporters, may be imported without a licence/certificate/ permission.

Prototypes

2.47

Import of new/second hand prototypes/ second hand samples not exceeding ten in number in a year may be allowed on payment of duty without a licence/ certificate/ permission to an Actual User (industrial) engaged in the production of or having industrial licence/letter of intent for research in the item for which prototype is sought for product development or research, as the case may be, upon a self – declaration to that effect, to the satisfaction of the customs authorities.

Restricted items for R&D

2.48

All restricted items, except live animals, required for R&D purpose may be imported without a licence/ certificate/permission by Government recognised Research and Development units.

Export Policy

2.49

The policy relating to Exports is given in Chapter-2 of the Policy. Further, Schedule 2, Appendix-1 of the ITC (HS) specifies the list of items which may be exported without a licence/certificate/permission but subject to terms and conditions specified in this behalf.

Application for Grant of Export Licence/ Certificate/ Permission

2.50

An application for grant of Export licence/ certificate/ permission in respect of items mentioned in Schedule 2 of ITC(HS) may be made in the form given in Appendix-16 or 16A, as the case may be, to the Director General of Foreign Trade and shall be accompanied by the documents prescribed therein. The Foreign Trade Facilitation Committee shall consider applications on merits for issue of export licence/certificate/permissions.

An Inter-Ministerial Working Group in DGFT shall consider applications for export of Special Chemicals, Organism, Materials, Equipment and Technologies (SCOMET) as specified in Schedule 2, Appendix-3 of ITC(HS) on the basis of guidelines issued in this regard from time to time.

DGFT may also issue, on application, Free Sale Certificate as per guidelines in force on medical and surgical equipments.

Export Of Items under State Trading Regime (STR)

2.51

An application for export of items mentioned in ITC(HS) under STR regime may be made to the Director General of Foreign Trade.

Exports Of Samples/Exhibits

2.52

An application for the export of samples or exhibits, which are restricted for export, may be made to the Director General of Foreign Trade.

Free of Cost Exports

2.52.1

The status holders shall be entitled to export freely exportable items on free of cost basis for export promotion subject to an annual limit of Rs.10 lakh or 2% of the average annual export realisation during the preceding three licensing years whichever is higher.

Gifts/Spares/Replacement Goods

2.53

For export of gifts, indigenous/imported warranty spares and replacement goods in excess of the ceiling/ period prescribed in paragraphs 2.32, 2.33 and 2.37 respectively of the Policy, an application may be made to the Director General of Foreign Trade.

Furnishing of Returns in respect Of Exports in non Physical form

2.54

All the exports made in non physical form by using communication links including high speed data communication links, internet, telephone line or any other channel which do not involve the Customs authorities has to be compulsorily reported on quarterly basis to the Electronic and Software Export Promotion Council in the proforma given in Appendix-4B.

These provisions shall be applicable to all the exporting units located anywhere in the country including those located in STP, SEZ, EHTP and under 100% EOU scheme.

Duty Free Import of R&D Equipment for Pharmaceuticals and Bio-technology Sector

2.55

Duty free import of goods (as specified in the list 28 of Customs notification No.21/2002 dated 1.3.2002, as amended from time to time) upto 25% of the FOB value of exports during the preceding licensing year, shall be allowed to the manufacturer exporters having Research and Development wing which is registered with the Department of Scientific and Industrial Research in the Ministry of Science and Technology subject to fulfillment of condition number 53(ii) of the said notification.

The eligible unit may furnish an application given in Appendix-34 to the Regional Licensing Authorities under whose jurisdiction the registered office of company or head office of the firm is located.

The Regional Licensing Authority shall verify the application on the basis of the declaration given by the unit and countersigned by Chartered Accountant.

2.55.1

Duty free imports of goods as specified in list 28A of Customs notification No. 21/2002 dated 1.3.2002, (as amended from time to time) upto 1% of the FOB value of exports made during the preceding licensing year, shall be allowed to agro chemicals sector unit having export turnover of Rs. 20 crore or above during preceding licensing year. Such facility shall be available only to a manufacturer having a research and development wing registered with Department of Scientific and Industrial Research in Ministry of Science and Technology subject to fulfilment of condition no.53A of the said notification.

The eligible unit shall apply in the form given in Appendix-34A to the Regional Licensing Authorities under whose jurisdiction the registered office of company or head office of the firm is located.

The Regional Licensing authority shall verify the application on the basis of the declaration given by the unit and countersigned by Chartered Accountant.

Conversion of E.P. copy of shipping bill from One Scheme To Another

2.56

If the Customs authorities, after recording reasons in writing, permit conversion of an E.P. copy of any scheme shipping bill on which the benefit of that scheme has not been availed, the exporter would be entitled to the benefit under the scheme in which shipment is subsequently converted.

Relocation of Industries

2.57

Plant and machineries would be permitted for import without a licence provided the depreciated value of such relocation plant exceeds Rs. 25 crore.

Offsetting of Export Proceeds

2.58

Subject to the specific approval of the Reserve Bank of India, any payables , or equity investment made by a licence holder under any export promotion scheme, can be used to offset receipts of his export proceeds. In such cases, the offsetting would be equal to the realisation of the export proceeds and the exporter would have to submit the following additional documents:

a)

Appendix-22B in lieu of the Bank Realisation Certificate.

b)

Specific permission of the Reserve Bank of India.

Quality Certification

2.59

It has been a constant endeavor to promote quality standards in the export product/units manufacturing the export product.

2.59.1

One of the salient features incorporated in the Foreign Trade Policy as per paragraph 3.5.2 Note.1 for the promotion of quality standards is the grant of Star Export House status on achievement of a lower threshold limit for units having ISO-9000 (series), ISO-14000 (Series) or HACCP certification or WHOGMP or SEI CMM level-2 & above status/certification.

2.59.2

The list of such agencies authorised to grant quality certification is given in Appendix-28A.

Any of the agencies desirous of enlistment in Appendix -28A may forward a request to the office of the Director General of Foreign Trade with the following documents:

a)

A valid accreditation certificate for quality management from National Accreditation Board for Certification Bodies (NABCB) or any other agency.

b)

List of firms/companies (whether Indian or foreign) granted certification by the applicant,

c)

Details on the logistical/infrastructural setup of the agency,

d)

An undertaking to the effect that "in case of any liability arising out of certification, the agency in India would be liable to the penal provisions under the FTDR Act or any other allied Acts".

2.59.3

However, in the case of foreign agencies accredited by a nodal agency in the parent country desirous of enlistment in Appendix-28-A, the following documents may be forwarded to the office of DGFT:

a)

A copy of the valid accreditation certificate of the foreign agency as also mentioning whether the accreditation agency is a member of IAF( International Accreditation Forum),

b)

Details of the Indian partner/agency/branch operating in India on behalf of the parent company,

c)

List of foreign and Indian agencies granted certification,

d)

An undertaking to the effect that "in case of any liability arising out of certification, the parent company and its partner/agency/ branch in India would be liable to Indian laws in Indian courts".

Grievance Redressal Mechanism

2.60

The provisions pertaining to the Grievance Redressal Mechanism is given in para 2.49 of the Foreign Trade Policy.