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Foreign Trade Policy

27th August 2009 -- 31st March 2014


w.e.f. 05.06.2012

CHAPTER-1A
LEGAL FRAMEWORK
1.1
Foreword

The Foreword spells out the broad framework.

1.2
Duration

(a) The Foreign Trade Policy (FTP) 2009-2014, incorporating provisions


relating to export and import of goods and services, shall come into force
with effect from 27th August, 2009 and shall remain in force upto 31st
March, 2014 unless otherwise specified. All exports and imports upto 26th
August 2009 shall be accordingly governed by the FTP 2004-2009.
(b) The Foreign Trade Policy, 2009-2014, incorporating the Annual
Supplement as updated on 5th June, 2012 shall come into force with effect
from 5th June, 2012, unless otherwise specified.

Notification
69 (RE-2013)/
2009-14

S.O.(E) In exercise of powers conferred by Section 5 of the Foreign Trade


(Development & Regulation) Act, 1992 read with paragraph 1.3 of the
Foreign Trade Policy (FTP) 2009-2014, as amended, the Central
Government hereby makes an amendment in paragraph 1.2(a) of FTP
2009-2014(RE-2013) by substituting the phrase shall remain in force upto
31st March, 2014 unless otherwise specified by the phrase shall remain
in force until further orders.
2.
The amended paragraph 1.2(a) of FTP 2009-14 (RE-2013) would be
as under:
1.2 (a)
The Foreign Trade Policy (FTP) 2009-2014, incorporating
provisions relating to export and import of goods and services, shall come
into force with effect from 27th August, 2009 and shall remain in force until
further orders. All exports and imports upto 26th August 2009 shall be
accordingly governed by the FTP 2004-2009.
Effect of this notification: The existing Foreign Trade Policy 2009-14 (RE2013) was to remain in force until 31.3.2014. To provide continuity in policy
environment, this is being extended beyond 31.3.2014 until further orders.
(Anup K. Pujari)

Director General of Foreign Trade


dgft[at]nic[dot]in
(Issued from File No.01/94/180/219/AM 14/PC-4)
Date Time-19/02/2014
1.3
Amendment

Central Government reserves right in public interest to make any


amendments by notification to this Policy in exercise of powers conferred
by Section 5 of FT(D&R) Act.

1.4
Transitional
Arrangements

Authorisation issued before commencement of FTP shall continue to be


valid for the purpose and duration for which such Authorisation was issued,
unless otherwise stipulated.

1.5

(a) In case an export or import that is permitted freely under FTP is


subsequently subjected to any restriction or regulation, such export or
import will ordinarily be permitted notwithstanding such restriction or
regulation, unless otherwise stipulated, provided that shipment of export or
import is made within original validity with respect to available balance and
time period of an irrevocable commercial letter of credit, established before
the date of imposition of such restriction.
(b) However for operationalizing such irrevocable commercial letter of
credit, the applicant shall have to register the Letter of Credit and contract
with the concerned RA within 15 days of the issue of any such restriction or
regulation.

CHAPTER-1B
SPECIAL FOCUS INITIATIVES
1B.1
Special Focus
Initiatives

(a) With a view to continously increasing our percentage share of global


trade and expanding employment opportunities, certain special focus
initiatives have been identified/continued for Market Diversification,
Technological Upgradation, Support to status holders, Agriculture,
Handlooms, Handicraft, Gems & Jewellery, Leather, Marine, Electronics
and IT Hardware manufacturing Industries, Green products, Exports of
products from North-East, Sports Goods and Toys sectors. Government of
India shall make concerted efforts to promote exports in these sectors by
specific sectoral strategies that shall be notified from time to time.
(b) Further Sectoral Initiatives in other sectors will also be announced from
time to time.

(i) Market Diversification


During 2008-09 to 2011-12, weaker demand in developed economies,
triggered by falling asset prices and increased economic uncertainty had
pulled down the growth of Indias exports to developed countries. To
insulate Indian exports from the decline in demand from developed
countries, in this Policy focus is on diversification of Indian exports to other
markets, specially those located in Latin America, Africa, parts of Asia and
Oceania. To achieve diversification of Indian exports, following initiatives
have been taken under this Policy.
(a) 29 new countries have been included within the ambit of Focus Market
Scheme.
(b) The incentives provided under Focus Market Scheme have been
increased from 2.5% to 3%.
(c) There has been a significant increase in the outlay under Market Linked
Focus Product Scheme by inclusion of more markets and products. This
ensures support for exports to all countries in Africa and Latin America, and
major Asian markets like China and Japan.
(ii) Technological Upgradation
To usher in the next phase of export growth, India needs to move up in the
value chain of export goods. This objective is sought to be achieved by
encouraging technological upgradation of our export sector. A number of
initiatives have been taken in this Policy to focus on technological
upgradation; such initiatives include:
(a) EPCG Scheme at zero duty has been introduced for certain engineering
products, electronic products, basic chemicals and pharmaceuticals,
apparel and textile, plastics, handicrafts, chemicals and allied products and
leather and leather products. This scheme is being expanded to cover more
export product groups including marine products, sports goods, toys, rubber
& rubber products, additional chemicals / allied products and additional
engineering products. The scheme is also being extended upto 31.3.2013.
(b) The existing 3% EPCG Scheme has been considerably simplified, to
ease its usage by the exporters.
(c) The facility of EPCG Scheme for Annual Requirement has been
introduced to reduce documentation and transaction time.
(d) To encourage value added manufacture export, a minimum 15% value
addition on imported inputs under Advance Authorisation Scheme has been
stipulated.

(e) A number of products including automobiles and other engineering


products have been included for incentives under Focus Product and
Market Linked Focus Product Schemes.
(f) Steps to encourage Project Exports shall be taken.
(iii) Support to status holders
The Government recognized Status Holders contribute approx. 60% of
Indias goods exports. To incentivise and encourage the status holders, as
well as to encourage Technological upgradation of export production,
additional duty credit scrip @ 1% of the FOB value of past export shall be
granted for specified product groups including leather, specific sub-sectors
in engineering, textiles, plastics, handicrafts and jute. This duty credit scrip
can be used for import / domestic procurement of capital goods by these
status holders. The SHIS scrip shall be subject to actual user condition.
However, transferability amongst status holders having manufacturing
facility has been allowed. The status holder incentive scrip scheme has
been expanded to cover more export product groups including marine
products, sports goods, toys, specified chemicals and allied products and
additional engineering products. The scheme is also being extended upto
31.3.2013.
(iv) Agriculture and Village Industry
(a) Vishesh Krishi and Gram Udyog Yojana
(b) Capital goods imported under EPCG will be permitted to be installed
anywhere in AEZ.
(c) Import of restricted items, such as panels, are allowed under various
export promotion schemes.
(d) Import of inputs such as pesticides are permitted under Advance
Authorisation for agro exports.
(e) New towns of export excellence with a threshold limit of Rs 150 crore
shall be notified.
(f) Additional flexibility for agri-infra scrip by way of limited transferability to
other status holders and the units in Food Parks allowed.
(g) List of items allowed for import for Park Houses notified in Appendix 37
F.
(v) Handlooms

(a) 2% bonus benefits under focus product shceme.


(b) Specific funds are earmarked under MAI / MDA Schemes for promoting
handloom exports.
(c) Duty free import entitlement of specified trimmings and embellishments
is 5% of FOB value of exports during previous financial year. Handloom
made-ups have also been included for the entitlement.
(d) Duty free import entitlement of hand knotted carpet samples is 1% of
FOB value of exports during previous financial year.
(e) Duty free import of old pieces of hand knotted carpets on consignment
basis for re-export after repair is permitted.
(f) New towns of export excellence with a threshold limit of Rs 150 crore
shall be notified.
(g) Machinery and equipment for effluent treatment plants is exempt from
customs duty.
(vi) Handicrafts
(a) Duty free import entitlement of tools, trimmings and embellishments is
5%of FOB value of exports during previous financial year. Entitlement is
broad banded, and shall extend also to merchant exporters tied up with
supporting manufacturers.
(b) Handicraft EPC is authorized to import trimmings, embellishments and
consumables on behalf of those exporters for whom directly importing may
not be viable.
(c) Specific funds are earmarked under MAI & MDA Schemes for promoting
Handicraft exports.
(d) CVD is exempted on duty free import of trimmings, embellishments and
consumables.
(e) New towns of export excellence with a reduced threshold limit of Rs 150
crore shall be notified.
(f) Machinery and equipment for effluent treatment plants are exempt from
customs duty.
(g) All handicraft exports would be treated as special Focus products and
entitled to higher incentives.

(h) In addition to above, 2% bonus benefits under Focus Product Scheme


for Handicraft exports.
(vii) Gems & Jewellery
(a) Import of gold of 8k and above is allowed under replenishment scheme
subject to import being accompanied by an Assay Certificate specifying
purity, weight and alloy content.
(b) Duty Free Import Entitlement (based on FOB value of exports during
previous financial year) of Consumables, Tools and additional items
allowed for:
(i) Jewellery made out of:
a) Precious metals (other than Gold & Platinum) 2%
b) Gold and Platinum 1%
c) Rhodium finished Silver 3%
(ii) Cut and Polished Diamonds 1%
(c) Duty free import entitlement of commercial samples shall be Rs.
300,000.
(d) Duty free re-import entitlement for rejected jewellery shall be 2% of FOB
value of exports.
(e) Import of Diamonds on consignment basis for Certification/ Grading &
re-export by the authorized offices/agencies of Gemological Institute of
America (GIA) in India or other approved agencies will be permitted.
(f) Personal carriage of Gems & Jewellery products in case of
holding/participating in overseas exhibitions increased to US$ 5 million and
to US$ 1 million in case of export promotion tours.
(g) Extension in number of days for re-import of unsold items in case of
participation in an exhibition in USA, increased to 90 days.
(h) In an endeavour an endeavour to make India a diamond international
trading hub, it is planned to establish Diamond Bourse(s).
(viii) Leather and Footwear
(a) Additional 2% bonus benefits under Focus Product Scheme.

(b) Finished Leather exports to be incentivised under Focus Product


Scheme.
(c) Duty free import entitlement of specified items is 3% of FOB value of
exports of leather garments during preceding financial year.
(d) Duty free entitlement for import of trimmings, embellishments and
footwear components for footwear (leather as well as synthetic), gloves,
travel bags and handbags is 3% of FOB value of exports of previous
financial year. Such entitlement shall also cover packing material, such as
printed and non-printed shoeboxes, small cartons made of wood, tin or
plastic materials for packing footwear.
(e) Machinery and equipment for Effluent Treatment Plants shall be
exempted from basic customs duty.
(f) Re-export of unsuitable imported materials such as raw hides & skins
and wet blue leathers is permitted.
(g) CVD is exempted on lining and interlining material notified at S.No 168
of Customs Notification No 21/2002 dated 01.03.2002.
(h) CVD is exempted on raw, tanned and dressed fur skins falling under
Chapter 43 of ITC (HS).
(i) Re-export of unsold hides, skins and semi finished leather shall be
allowed from Public Bonded warehouse without payment of export duty.
(ix) Marine Sector
(a) Imports for technological upgradation under EPCG in fisheries sector
(except fishing trawlers, ships, boats and other similar items) exempted
from maintaining average export obligation.
(b) Duty free import of specified specialised inputs/chemicals and flavouring
oils is allowed to the extent of 1% of FOB value of preceding financial
years export.
(c) To allow import of monofilament longline system for tuna fishing at a
concessional rate of duty and Bait Fish for tuna fishing at Nil duty.
(d) A self removal procedure for clearance of seafood waste is applicable
subject to prescribed wastage norms.
(e) Marine sector included for benefits under zero duty EPCG scheme.

(x) Electronics and IT Hardware Manufacturing Industries


(a) Export of electronic goods to be incentivized under Focus Product
Scheme.
(b) Expeditious clearance of approvals required from DGFT shall be
ensured.
(c) Exporters /Associations would be entitled to utilize MAI & MDA
Schemes for promoting Electronics and IT Hardware Manufacturing
Industries exports.
(d) Electronics Sector included for benefits under SHIS scheme.
(xi) Sports Goods and Toys
(a) Duty free import of specified specialised inputs allowed to the extent of
3% of FOB value of preceding financial years export.
(b) Sports goods and toys shall be treated as a Priority sector under MDA /
MAI Scheme. Specific funds would be earmarked under MAI / MDA
Scheme for promoting exports from this sector.
(c) Applications relating to Sports Goods and Toys shall be considered for
fast track clearance by DGFT.
(d) Sports Goods and Toys are treated as special focus products and
entitled to higher incentives.
(e) In addition to above, 2% bonus benefits under Focus Product Scheme
for Sports Goods & Toys.
(f) Sports Goods & Toys included for benefits under zero duty EPCG and
SHIS schemes.
(xii) Green products and technologies
India aims to become a hub for production and export of green products
and technologies. To achieve this objective, special initiative will be taken to
promote development and manufacture of such products and technologies
for exports. To begin with, focus would be on items relating to
transportation, solar and wind power generation and other products as may
be notified which will be incentivized under Reward Schemes of Chapter 3
of FTP.
(xiii) Incentives for Exports from the North Eastern Region

In order to give a fillip to exports of products from the north-eastern States,


notified products of this region would be incentivized under Reward
Schemes of Chapter 3 of FTP.
Notification
27 (RE - 2012) /
2009-2014

1. The word "marine products" is deleted from para 1B.1 (iii) of FTP 200914.
Date Time-28/12/2012

CHAPTER-1C
BOARD OF TRADE
1C.1
Board of Trade
(BOT)
1C.2
Terms of
Reference

BOT has a clear and dynamic role in advising government on relevant


issues connected with Foreign Trade.

BOT has following terms of reference:


(i) To advise Government on Policy measures for preparation and
implementation of both short and long term plans for increasing exports in
the light of emerging national and international economic scenarios;
(ii) To review export performance of various sectors, identify constraints
and suggest industry specific measures to optimize export earnings;
(iii) To examine existing institutional framework for imports and exports and
suggest practical measures for further streamlining to achieve desired
objectives;
(iv) To review policy instruments and procedures for imports and exports
and suggest steps to rationalize and channelize such schemes for optimum
use;
(v) To examine issues which are considered relevant for promotion of
Indias foreign trade, and to strengthen international competitiveness of
Indian goods and services; and
(vi) To commission studies for furtherance of above objectives.

1C.3
Composition

Commerce & Industry Minister will be the Chairman of the Board of Trade
(BOT). Government shall also nominate upto 25 persons, of whom at least
10 will be experts in trade policy. In addition, Chairmen of recognized EPCs
and President or Secretary-Generals of National Chambers of Commerce
will be ex-officio members. BOT will meet at least once every quarter.

CHAPTER-2
GENERAL PROVISIONS REGARDING IMPORTS AND
EXPORTS
2.1
(a) Exports and Imports shall be Free, except when regulated. Such
Exports and
regulation would be as per FTP and/or ITC (HS).
Imports Free,
unless regulated (b) ITC (HS) contains the item wise export and import policy regimes. The
ITC (HS) is aligned with international Harmonized System goods
nomenclature maintained by World Customs Organization
(http://www.wcoomd.org).
(c) Schedule 1 of ITC (HS) gives the Import Policy Regime and Schedule 2
of ITC (HS) gives the Export Policy Regime.
(d) Except where it is clearly specified in Schedule 1 of ITC (HS), Import
Policy is for new goods and not for Second Hand goods. For Second Hand
goods, the Import Policy Regime is given in Para 2.17 on this FTP.
2.1.1
Despite the policy for Arms and related material as is given in Chapter 93
Prohibition on of ITC (HS), the import / export of arms and related material from / to Iraq
Import and Export shall be Prohibited.
of Arms and
related material
from / to Iraq
Notification
68 (RE-2013)/
2009-14
Export of Arms
and related
materials to
Government of
Iraq

In exercise of powers conferred by Section 5 of the Foreign Trade


(Development & Regulation) Act, 1992 (No. 22 of 1992), as amended, read
with Para 1.3 of the Foreign Trade Policy, 2009-2014, the Central
Government hereby makes the following amendments in Para 2.1.1 of
Foreign Trade Policy, 2009-14 with immediate effect:
2. Existing Para 2.1.1 of Foreign Trade Policy, 2009-14 shall be substituted
as under:
2.1.1 The import/export of Arms and related material from/to Iraq is
Prohibited. However, export of Arms and related material to Government
of Iraq shall be permitted subject to No Objection Certificate from the
Department of Defence Production.
3. Effect of this notification:
Export of Arms and related material to Government of Iraq has been

permitted subject to No Objection Certificate from the Department of


Defence Production.
(Anup K. Pujari)
Director General of Foreign Trade
E-mail: dgft[at]nic[dot]in
(Issued from 01/93/180/38/AM 14/PC-2B)
Date Time-12/02/2014
2.1.2
Prohibition on
Direct or Indirect
Import and Export
from/ to
Democratic
Peoples Republic
of Korea

Direct or indirect export and import of following items, whether or not


originating in Democratic Peoples Republic of Korea (DPRK), to / from,
DPRK is Prohibited:
All items, materials equipment, goods and technology including as set out
in lists in documents S/2006/814,S/2006/815 (including S/2009/205),
S/2009/364 and S/2006/853 (United Nations Security Council Documents)
INFCIRC/254/Rev.9/Part1a and INFCIRC/254/Rev.7/Part 2a (IAEA
documents) which could contribute to DPRKs nuclear-related, ballistic
missile-related or other weapons of mass destruction-related programmes.
Notification

Paragraph 2.1.2 of the Foreign Trade Policy stands substituted as follows: 14 (RE-2013)/
2.1.2
2009-14
Direct or indirect export and import of following items,
Amendment in
whether or not originating in Democratic Peoples
Paragraph 2.1.2 of
P r o h i b i t i o n o n Republic of Korea (DPRK), to / from, DPRK is
the FTP
Direct or Indirect Prohibited:
Import
and
Export from /to
D e m o c r a t i c i. All items, materials, equipment, goods and
P e o p l e s technology including as set out in lists in documents
R e p u b l i c o f INFCIRC/254/Rev.11/Part 1 and INFCIRC/254/
Korea
Rev.8/Part 2 (IAEA documents), S/2012/947,
S/2009/364 and S/2006/853 (UN Security Council
documents) and Annex III to UN Security Council
resolution 2094 (2013) which could contribute to
DPRKs nuclear-related, ballistic missile-related or
other weapons of mass destruction-related
programmes;

ii. Luxury goods, including but not limited to the items


specified in Annex IV to UN Security Council
resolution 2094 (2013).

2.

Purpose of this notification:

(i) This notification substitutes the updated versions of UN and IAEA


documents, namely, INFCIRC/254/Rev.11/Part 1 and
INFCIRC/254/Rev.8/Part 2 (IAEA documents), S/2012/947, S/2009/364 and
S/2006/853 (UN Security Council documents) and Annex III to UN Security
Council resolution 2094 (2013) for the existing documents mentioned in
Para 2.1.2 of FTP.
(ii) This notification also adds luxury goods specified in Annex IV to UNSC
Resolution 2094(2013) to the prohibition list for the purpose of export and
import, to and from, DPRK.
Date Time-31/05/2013
2.1.3

(a) Direct or indirect export and import of all items, materials, equipment,

Prohibition on
Direct or Indirect
Import and Export
from / to Iran

goods and technology which could contribute to Irans enrichment-related,


reprocessing or heavy water related activities, or to development of nuclear
weapon delivery systems, as mentioned below, whether or not originating in
Iran, to / from Iran is Prohibited:
(i) Items listed in INFCIRC/254/Rev.9/Part 1 and INFCIRC/254/Rev.7/Part 2
(IAEA Documents)
(ii) Items listed in S/2006/263 (UN Security Council Document)
(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 website ( www.iaea.org ).

2.1.4
Prohibition on
Import of
Charcoal from
Somalia

Direct or indirect import of charcoal is prohibited from Somalia, irrespective


of whether or not such charcoal has originated in Somalia [United Nations
Security Council Resolution 2036 (2012)]. Importers of Charcoal shall
submit a declaration to Customs that the consignment has not originated in
Somalia.

2.10
Penalty

If an Authorisation holder violates any condition of such Authorisation or


fails to fulfil export obligation, he shall be liable for action in accordance with
FT (D&R) Act, the Rules and Orders made there under, FTP and any other
law for time being in force.

2.11
State Trading

Any goods, import or export of which is governed through exclusive or


special privileges granted to State Trading Enterprises (STE(s)), may be
imported or exported by STE(s) as per conditions specified in ITC (HS).
DGFT may, however, grant an Authorisation to any other person to import

or export any of these goods. Such STE(s) shall make any such purchases
or sales involving imports or exports solely in accordance with commercial
considerations, including price, quality, availability, marketability,
transportation and other conditions of purchase or sale in a non
discriminatory manner and shall afford enterprises of other countries
adequate opportunity, in accordance with customary business practices, to
compete for participation in such purchases or sales.
2.12
Importer-Exporter
Code (IEC)
Number

(a) No export or import shall be made by any person without an IEC


number unless specifically exempted. An IEC number shall be granted on
application by competent authority in accordance with procedure specified
in HBP v1.
(b) Exempt Categories and Permanent IEC numbers are given in Para 2.8
of HBP v1.

2.13
Trade with
Neighbouring
Countries

DGFT may issue instructions or frame schemes as may be required to


promote trade and strengthen economic ties with neighbouring countries.

2.14
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 Conventions.

2.15
Trade with Russia
under DebtRepayment
Agreement

In case of trade with Russia under Debt Repayment Agreement, DGFT may
issue instructions or frame schemes as may be required, and anything
contained in FTP, in so far as it is inconsistent with such instructions or
schemes, shall not apply.

2.16
Actual User
Condition

Goods which are importable freely without any Restriction may be


imported by any person. However, if such imports require an Authorisation,
actual user alone may import such good(s) unless actual user condition is
specifically dispensed with by DGFT.

2.17
Second Hand
Goods

For Second Hand goods, the Import Policy Regime is given as under:
Import Policy

Conditions,

if any

I. Second Hand Capital Goods Group


(a) Restricted Category:
(i)
Personal computers /
laptops
(ii) Photocopier machines /

Restricted

Allowed to be impor
per provisions of
(HS), HBP v1, Publ

Digital multifunction Print &


Copying Machines
(iii) Air conditioners
(iv)Diesel generating sets

an Authorisation
import of the specif
hand item.

(b) Free Category:


(i)
Refurbished / reconditioned spares of Capital
Goods

Free

(ii) All other second hand


capital goods

Free

II. All other Second Hand


Goods

Restricted

Subject to condition
in para 2.33 of HBP

Notification
35 (RE - 2012) /
2009-2014
Poliy on Second
Hand Goods

Para 2.17 of Foreign Trade Policy, 2009-2014 is revised to read as under:


S.No.

Categories of
Import Policy
Second Hand Goods

Second Hand Capital


Goods

(a)

i.
Personal
computers/ laptops
including their
refurbished/ reconditioned spares
ii. Photocopier
Restricted
machines/ Digital
multifunction Print &
Copying Machines

Conditions, if any

Importable aga
authorization

iii. Air Conditioners


iv. Diesel generating
sets

(b)

i. Refurbished/ reconditioned spares of Free


Capital Goods

(c)

i. All other second


Free
hand capital goods

Subject to produc
of
Charter
Engineer certific
to the effect that s
spares have at le
80% residual life
original spare.

{other than (a) & (b)


above}
ii

Second Hand Goods


other than capital Restricted
goods

importable aga
authorization

Date Time-28/02/2013
2.17A
A SEZ unit/Developer/ Co-developer may be allowed to dispose off in DTA,
Removal of Scrap any waste or scrap, including any form of metallic waste and scrap,
/ Waste from SEZ generated during manufacturing or processing activity, without an
authorization, on payment of applicable Customs Duty, provided these are
freely importable.
Notification
28 (RE-2013) /
2009-2014

S.O. (E): In exercise of powers conferred under Section 5 of the Foreign


Trade (Development and Regulation) Act, 1992 read with paragraph 2.1 of

Amendment in
Para 2.17 A of
Foreign Trade
Policy, 2009-2014

the Foreign Trade Policy, 2009-2014, as amended from time to time, the
Central Government hereby notifies the following amendment in the
Foreign Trade Policy, 2009-2014:
2. The phrase "provided these are freely importable" in Para 2.17 A of
Foreign Trade Policy, 2009-2014 stands deleted.
3. After the amendment, Para 2.17 A of Foreign Trade Policy, 2009-2014
shall read as under:
"A SEZ unit/Developer/ Co-developer may be allowed to dispose off in DTA
any waste or scrap, including any form of metallic waste and scrap,
generated during manufacturing or processing activity, without an
authorization, on payment of applicable Customs Duty."
4. Effect of this Notification:
Para 2.17A of FTP has been harmonized with Section 47 of SEZ Rules,
2006. Accordingly, sale of waste or scrap from SEZ to DTA is permitted
without an authorization.
Date Time-24/07/2013

2.18
Import of
Samples

Import of samples shall be governed by Chapter 2 of HBP v1.

2.19
Import of Gifts

Import of gifts 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.

2.2
Compliance of

In line with the National Treatment proviso of World Trade Organization


(http://www.wto.org), Domestic Laws/ Rules/ Orders/ Regulations/ technical

Imports with
Domestic Laws

specifications/ environmental/ safety and health norms applicable to


domestically produced goods shall apply, mutatis mutandis, to imports,
unless specifically exempted.

2.20
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
Authorisation.
(c) Exporters coming from abroad are also allowed to import drawings,
patterns, labels, price tags, buttons, belts, trimming and embellishments
required for export, as part of their passenger baggage without an
Authorisation.

2.21
Freely exportable new or second hand capital goods, equipments,
Import on Export components, parts and accessories, containers meant for packing of goods
Basis
for exports, jigs, fixtures, dies and moulds may be imported for export
without an Authorisation on execution of LUT / BG with Customs
Authorities.
2.22
Re-import of
goods repaired
abroad

Capital goods, equipments, components, parts and accessories, whether


imported or indigenous, except those restricted under ITC (HS) may be
sent abroad for repairs, testing, quality improvement or upgradation or
standardization of technology and re-imported without an Authorisation.

2.23
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.

2.24
Sale of goods on high seas for import into India may be made subject to
Sale on High Seas FTP or any other law in force.
2.25
Import under
Lease Financing

No specific permission of RA is required for lease financed capital goods.

2.26
Clearance of
Goods from
Customs

Good already imported / shipped / arrived, in advance, but not cleared from
Customs may also be cleared against an Authorisation issued
subsequently.

2.27

(a) Wherever any duty free import is allowed or where otherwise specifically

Execution of BG
/LUT

stated, importer shall execute prescribed LUT/BG/Bond with Customs


Authority 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 HBP v1.

2.28
Private/Public
Bonded
Warehouses for
Imports

(a) Private / Public bonded warehouses may be set up in DTA as per terms
and conditions of notification issued by DoR. 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) If such goods are not cleared for home consumption within a period of
one year or such extended period as the custom authorities may permit,
importer of such goods shall re-export the goods.

2.29
Free Exports

All goods 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.

2.3
Interpretation of
Policy

(a) The decision of DGFT shall be final and binding on all matters relating to
interpretation of Policy, or provision in HBP v1, HBP v2 or classification of
any item for import / export policy in the ITC (HS).
(b) A Policy Interpretation Committee (PIC) may be constituted to aid and
advice DGFT.

2.30
Export of
Samples

Export of Samples and Free of charge goods shall be governed by


provisions given in Chapter 2 of HBP v1.

2.31
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 baggage, food items (free, restricted or prohibited)
strictly for their personal consumption.
(b) Samples of such items that are otherwise freely exportable under FTP

may also be exported as part of passenger baggage without an


Authorisation.
2.32
Export of Gifts

Goods, including edible items, of value not exceeding Rs.500000/- 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, without an
Authorisation.

2.33
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 period of such goods subject to approval of RBI.

2.34
Third Party
Exports

Third party exports, as defined in Chapter 9 shall be allowed under FTP.

2.35
Export of
Imported Goods

(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 restricted for import or export in ITC (HS).
(b) Exports of such goods imported against payment in freely convertible
currency would be permitted against payment in freely convertible currency.

Notification
16 (RE-2013)/
2009-2014
Amendment in
Para 2.35(b) of
FTP

S.O. (E): In exercise of powers conferred under Section 5 of the Foreign


Trade (Development and Regulation) Act, 1992 read with paragraph 2.1 of
the Foreign Trade Policy, 2009-2014, as amended from time to time, the
Central Government hereby makes the following amendment in paragraph
2.35 (b) of Foreign Trade Policy, 2009-2014:
2.
The existing sentence in Para 2.35(b) of Foreign Trade Policy,
2009-2014 will be followed by:
except to countries as notified by DGFT from time to time. Export
of such goods will be permitted against payment in Indian rupees to the
notified countries subject to at least 15% value addition.
3.
After the amendment, Para 2.35(b) of Foreign Trade Policy, 20092014 shall read as under:
Exports of such goods imported against payment in freely convertible
currency would be permitted against payment in freely convertible currency
except to countries as notified by DGFT from time to time. Export of
such goods will be permitted against payment in Indian rupees to the
notified countries subject to at least 15% value addition.
4.
Effect of this Public Notice:
An enabling provision has been made to allow export of goods imported

against payment in freely convertible currency where export proceeds will


be realized in rupees. This dispensation will be applicable to such countries
as would be notified by DGFT from time to time. They also have to achieve
15% value addition.
Date Time-06/06/2013
17 (RE-2013)/
2009-14
Notificatin of Iran
Under Para 2.35
(b) of FTP

S.O. (E): In exercise of powers conferred under Section 5 of the Foreign


Trade (Development and Regulation) Act, 1992 read with paragraph 2.1 of
the Foreign Trade Policy, 2009-2014, as amended from time to time, the
Central Government hereby notifies Iran under paragraph 2.35 (b) of
Foreign Trade Policy, 2009-2014
2.
Accordingly, exports of such goods to Iran which have been imported
against payment in freely convertible currency would be permitted against
payment in Indian Rupees also, subject to at least 15% value addition.
3.

Effect of this Public Notice:

Countries eligible to avail benefits of Para 2.35 (b) of Foreign Trade Policy,
2009-2014 have to be notified. Iran is being notified now as eligible.
Date Time-10/06/2013
79 (RE-2013) /
2009-14

The Para 2.35(b) of FTP is modified further to read as under:


(i)"Exports of such goods imported against payment in freely convertible
currency would be permitted against payment in freely convertible currency
except to countries as notified by DGFT from time to time. Export of such
goods would be permitted against payment in Indian Rupees to the notified
countries subject to at least 15% value addition.
(ii) Accordingly, exports of such goods to Iran which have been imported
against payment in freely convertible currency would be permitted against
payment in India Rupees also, subject to at least 15% value addition.
Further, re-export of food, medicine and medical equipment will not be
subject to minimum value addition requirement. The ITC (HS) codes for
these goods will cover Chapters 2,3,4,7-11 and Chapters 15-21,23,30 and
only Headings 9018, 9019, 9020, 9021 & 9022 of Chapter-90 of ITC (HS)
subject to all conditions of FTP 2009-14 and ITC (HS) 2012 as applicable.
(iii) Bird's eggs under HS:0407 & 0408 and Rice under HS:1006 are not
covered under this dispensation.
(iv) Exports under this dispensation shall not be eligible for any export
incentives.
Effect of this Notification:

Re-export of food, medicine and medical equipment to Iran will not be


subject to any value addition requirement. Goods imported against freely
convertible currencies and re-exported to Iran against rupee payment shall
not be eligible for any export incentive.
Date Time-30/04/2014
2.36
Export of
Imported Goods
under Bond
Procedures

Goods, including those mentioned as Restricted for import (except


Prohibited items) may be imported under Customs Bond for export in
freely convertible currency without an Authorisation provided that item is
freely exportable without any conditionality / requirement of Authorisation /
Licence / permission as may be required under Schedule 2 Export Policy
of the ITC (HS).

2.36A

Hides, Skins and semi finished leather may be imported in the Public
Bonded warehouse for the purpose of DTA sale and the unsold items
thereof can be re-exported from such bonded warehouses at 50% of the
applicable export duty. However, this facility shall not be allowed for import
under Private Bonded warehouse.

2.37
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 clearance by Customs authorities, provided
that replacement goods are not mentioned as restricted items for exports in
ITC (HS).

2.38
Export of
Repaired Goods

Goods or parts, except restricted under ITC (HS) thereof, 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.

Notification
24 (RE-2013) /
2009-14
Amendment in
Para 2.38 of FTP

S.O. (E): In exercise of powers conferred under Section 5 of the Foreign


Trade (Development and Regulation) Act, 1992 read with paragraph 2.1 of
the Foreign Trade Policy, 2009-2014, as amended from time to time, the
Central Government hereby makes the following amendment in paragraph
2.38 of Foreign Trade Policy, 2009-2014:
2.
The existing sentence in Para 2.38 of Foreign Trade Policy, 20092014 will be followed by:
However, 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.
3.
After the amendment, Para 2.38 of Foreign Trade Policy, 2009-2014
shall be as under:

Goods or parts, except restricted under ITC (HS) thereof, 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. However, 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.
4.
Effect of this Public Notice:
Defective parts/spares imported exclusively for undertaking root
cause analysis, testing and evaluation purpose by the Companies/firms and
Original Equipment Manufacturers may not be re-exported.
Date Time-19/06/2013
2.39
(a) Private bonded warehouses exclusively for exports may be set up in
Private Bonded DTA as per terms and conditions of notifications issued by DoR.
Warehouses for
(b) Such warehouses shall be entitled to procure goods from domestic
Exports
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.
2.4
Procedure

DGFT may, specify procedure to be followed by an exporter or importer or


by any licensing / regional authority 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, or amendments if any, shall
be published by means of a Public Notice.

2.40
(a) All export contracts and invoices shall be denominated either in freely
Denomination of convertible currency or Indian rupees but export proceeds shall be realized
Export Contracts 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 ACU
or Nepal or Bhutan. Additionally, rupee payment through Vostro account
must be against payment in free foreign currency by buyer in his nonresident bank account. Free foreign exchange remitted by buyer to his nonresident bank (after deducting the bank service charges) 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. Central Government may
relax provisions of this paragraph in appropriate cases. Export contracts

and Invoices can be denominated in Indian rupees against EXIM Bank /


Government of India line of credit.
2.40A
Export to Iran
Rea l i s a t i o n s in
I ndi a n R u p e e s

Export proceeds against specific exports to Iran realized in Indian rupees


are permitted to avail exports benefits/ incentives under the Foreign Trade
Policy, 2009-14, at par with export proceeds realized in freely convertible
currency.

Notification
89 (RE-2013) /
2009-14
Export benefits /
incentives against
exports to Iran

In exercise of the powers conferred by Section 5 of the Foreign Trade


(Development and Regulation) Act, 1992 read with Para 2.1 of the Foreign
Trade Policy, 2009-2014, the Central Government hereby makes the
following amendment in the Para 2.40A of Foreign Trade Policy, 20092014:
2. The word specific appearing in the first line of Para 2.40A of Foreign
Trade Policy, 2009-2014 is hereby deleted:
3. After deleting, Para 2.40A of Foreign Trade Policy, 2009-2014 shall read
as under:
Para 2.40A: Export proceeds against exports to Iran realized in Indian
rupees are permitted to avail exports benefits/ incentives under the Foreign
Trade Policy, 2009-14, at par with export proceeds realized in freely
convertible currency.
4. Effect of this notification: The word specific has been deleted from Para
2.40A of Foreign Trade Policy, 2009-2014.
(Pravir Kumar)
Director General of Foreign Trade
E-mail: dgft@nic.in
[Issued from (01/93/180/25/AM-12/PC-2(B)]
Date Time-06/08/2014

2.41
Realisation of
Export Proceeds

If an exporter fails 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 action in accordance with provisions of FT (D&R) Act, Rules
and Orders made there under and FTP.

2.42
Consignments of items meant for exports shall not be withheld / delayed for
Free movement of any reason by any agency of Central / State Government. In case of any
export goods
doubt, authorities concerned may ask for an undertaking from exporter.
2.42.1

No seizure of stock shall be made by any agency so as to disrupt

No seizure of
Stock

manufacturing activity and delivery schedule of exports. In exceptional


cases, concerned agency may seize the stock on basis of prima facie
evidence. However, such seizure should be lifted within 7 days.

2.43
Basic objective of Export Promotion Councils (EPCs) is to promote and
Export Promotion develop Indian exports. Each Council is responsible for promotion of a
Councils (EPC)
particular group of products, projects and services as given in HBP v1.
2.44
Any person, applying for:
Registration-cum(a) An Authorisation to import / export, (except items) listed as Restricted
Membership
items in ITC (HS) or
Certificate
(RCMC)
(b) Any other benefit or concession under FTP shall be required to furnish
RCMC granted by competent authority in accordance with procedure
specified in HBP v1 unless specifically exempted under FTP. Certificate of
Registration as Exporter of Spices (CRES) issued by Spices Board shall be
treated as Registration-Cum-Membership Certificate (RCMC) for the
purposes under this Policy.
2.45
Trade Facilitation
through EDI
Initiatives

A secure EDI Message Exchange system for various documents i.e.


Authorisations, Shipping Bills, IEC, Application Fee, RCMCs has been
established with trade partners i.e. Customs, Banks and Export Promotion
Councils. These documents are no longer required to be physically filed
with DGFT or transmitted physically to the concerned partners. Therefore, it
has reduced the transaction cost for the exporters. It is the endeavour of
DGFT to enlarge the scope and domain of EDI exchange continuously.

2.45.1
DGCI&S
Commercial
Trade Data

DGCI&S has put in place a Data Suppression Policy. Transaction level data
would not be made publically available to protect privacy. DGCI&S trade
data shall be made available at aggregate level with a minimum possible
time lag in a query based structured format on commercial criteria.

2.45.2
Fiscal Incentives
to promote EDI
Initiatives
adoption

To encourage usage of on-line filing of applications for authorizations/IEC,


incentives are provided to applicants through a reduced application fee as
detailed in the Hand Book of Procedures

2.46
Regularization of
EO default and
settlement of
customs duty and
interest through

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 Central Board of Excise and Customs to decide such cases
also with effect from 01.04.2005.

Settlement
Commission
2.47
Easing of
Documentation
Requirement

DGFT has provided on-line facility for filing applications to obtain various
authorizations / IECode. The authorizations are issued and transmitted
electronically to Customs for clearance so as to reduce the required
documentation. DGFT has also become Indias first digital signature
enabled department in Government of India, which has introduced a higher
level of Encrypted 2048 bit Digital Signature for enhanced security in
communications with essential features like authentication, Privacy, nonrepudiation and integrity in the virtual world.

2.48
Exemption /
Remission of
Service Tax in
DTA

For all goods and services which are exported from units in DTA and units
in EOU / EHTP / STP / BTP exemption / remission of service tax levied and
related to exports, shall be allowed, as per prescribed procedure in Chapter
4 of HBP v1.

2.48.1
Exemption from
Service Tax in
SEZ

Units in SEZ shall be exempted from service tax.

2.48.2
For all goods and services exported from India, services received /
Exemption from rendered abroad, where ever possible, shall be exempted from service tax.
Service Tax on
Services received
abroad
2.49
DGFT has a commitment to function as a facilitator of exports and imports.
DGFT as a
Focus is on good governance, which depends on clean, transparent and
facilitator of
accountable delivery systems.
exports / imports
2.49.1
Citizens Charter

DGFT has in place a Citizens Charter, giving time schedules for providing
services to clients, and details of grievance committees at different levels.

2.49.2
a) Paragraph 2.5 of FTP contains the provision for relaxation of Policy and
Personal Hearing Procedures on grounds of genuine hardship and adverse impact on trade.
by DGFT
DGFT may consider such request after consulting respective Norms
Committee, EPCG Committee and Policy Relaxation Committee (PRC).
b) As a last resort to redress grievances of Importers/Exporters, DGFT
may provide an opportunity for Personal Hearing (PH). For such PH, a
specific request has to be made to DG if following conditions are satisfied:

i.
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, and
ii.
a request for review before the said Committee or
Authority has been filed,
iii.
such Committee or Authority has considered the request
for a review, and
iv.
the exporter/ importer continues to be aggrieved.
c) The decision conveyed in pursuance to the personal hearing shall be
final and binding.
d) 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
F.T.(D&R) Act, 1992, as amended from time to time.
Notification
08 (RE-2013)/
2009-14
Grievance
Redressal

S.O.(E) In exercise of powers conferred by Section 5 of the Foreign Trade


(Development & Regulation) Act, 1992 (No. 22 of 1992), read with
paragraph 2.1 of the Foreign Trade Policy, 2009-2014, as amended from
time to time, the Central Government hereby substitutes the contents of the
existing Para 2.49.2 of Foreign Trade Policy 2009-14 as under;
2.49.2 Personal Hearing by DGFT
a) Paragraph 2.5 of FTP contains the provision for relaxation of Policy and
Procedures on grounds of genuine hardship and adverse impact on trade.
DGFT may consider such request after consulting respective Norms
Committee, EPCG Committee and Policy Relaxation Committee (PRC).
b) As a last resort to redress grievances of Importers/Exporters, DGFT
may provide an opportunity for Personal Hearing (PH). For such PH, a
specific request has to be made to DG if following conditions are satisfied:
i.
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, and
ii.
a request for review before the said Committee or
Authority has been filed,
iii.
such Committee or Authority has considered the request
for a review, and
iv.
the exporter/ importer continues to be aggrieved.
c) The decision conveyed in pursuance to the personal hearing shall be
final and binding.

d) 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
F.T.(D&R) Act, 1992, as amended from time to time.
2.

Effect of the Notification:


The existing grievance redressal mechanism stands revised.

(Anup K. Pujari)
Director General of Foreign Trade
E-mail: dgft.nic.inDate Time-22/04/2013
2.5
DGFT may pass such orders or grant such relaxation or relief, as he may
Exemption from deem fit and proper, on grounds of genuine hardship and adverse impact
Policy/ Procedure on trade. DGFT may, in public interest, exempt any person or class or
category of persons from any provision of FTP or any procedure and may,
while granting such exemption, impose such conditions as he may deem fit.
Such request may be considered only after consulting committees as
under:
Sl.
No

Description

Committee

(a)

Fixation / modification of Norms Committee


product norms under all
schemes

(b)

Nexus with Capital Goods EPCG Committee.


(CG) and benefits under
EPCG Schemes

(c)

All other issues

Policy
Relaxati
Committee
(PRC

2.50
Export of
perishable
agricultural
products

To reduce transaction and handling costs, a single window system to


facilitate export of perishable agricultural produce has been introduced. The
system will involve creation of multi-functional nodal agencies to be
accredited by Agricultural and Processed Food Products Export
Development Authority (APEDA), New Delhi. The detailed procedures have
been notified at Appendix 40 to HBP v1.

2.51
Niryat Bandhu

A novel Niryat Bandhu scheme for mentoring first generation


entrepreneurs has been conceptualised. The Officer (Niryat Bandhu) would
primarily mentor interested individuals in the arena of international
business. Such hand-holding by officers of DGFT would help the new
exporters/importers by leveraging the knowledge base of officers and by

providing timely and appropriate guidance.


2.52
e-BRC

Bank Realization Certificates (BRCs), evidencing receipt of export proceeds


would be transmitted electronically from the respective banks to the DGFT.
This will bring down transaction cost to the exporters as they will not be
required to obtain physical copies of BRCs from the banks and then submit
such physical copy to DGFT.

2.6
Principles of
Restriction

DGFT may, through a notification, adopt and enforce any measure


necessary for: (a) Protection of public morals;
(b) Protection of human, animal or 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.

2.7
Export / Import of
Restricted Goods/
Services

Any goods / service, the export or import of which is Restricted may be


exported or imported only in accordance with an Authorisation / Permission/
License or in accordance to the procedure prescribed in a notification /
public notice issued in this regard.

2.8
Terms and
Conditions of an
Authorisation

Every Authorisation shall contain such terms and conditions as may be


specified by RA which may include:
(a) Description, quantity and value of goods;
(b) Actual User condition;
(c) Export Obligation;
(d) Minimum Value addition to be achieved;
(e) Minimum export/import price;
(f) Validity period as specified in HBP v1.

2.9
No person may claim an Authorisation as a right and DGFT or RA shall
Authorisation -not have power to refuse to grant or renew the same in accordance with
a Right
provisions of FT (D&R) Act, Rules made there under and FTP.

CHAPTER-3

PROMOTIONAL MEASURES
3.1
Assistance to
States for
Developing
Export
Infrastructure and
Allied Activities
(ASIDE)

(a) The objective of ASIDE scheme is to establish a mechanism for


involving the State Governments to participate in funding of infrastructure
critical for growth of exports by providing export performance linked
financial assistance to them. The Scheme is administered by Department of
Commerce (DoC).
(b) The activities aimed at development of infrastructure for exports can be
funded from the scheme provided such activity has overwhelming export
content and their linkage with exports is fully established. The specific
purposes for which funds can be sanctioned and utilized under the Scheme
are as follows:
(i) Creation of new Export Promotion Industrial Parks/Zones (SEZs/Agri.
Business Zones) and augmenting facilities in the existing ones.
(ii) Setting up of electronics and other related infrastructure in export
conclave.
(iii) Equity participation in infrastructure projects including the setting up of
SEZs.
(iv) Meeting requirements of capital outlay of EPIPs/EPZs/SEZs.
(v) Development of complementary infrastructure such as, roads
connecting the production centers with the ports, setting up of Inland
Container Depots and Container Freight Stations.
(vi) Stabilizing power supply through additional transformers and islanding
of export production centre etc.
(vii) Development of minor ports and jetties to serve export purpose.
(viii) Assistance for setting up Common Effluent Treatment facilities and
(ix) Any other activity as may be notified by DoC.
Details of ASIDE Scheme are available at: http://www.commerce.nic.in

3.10

EXPORT AND TRADING HOUSES

3.10.1
Eligibility for
Export and
Trading Houses
Status

Merchant as well as Manufacturer Exporters, Service Providers, Export


Oriented Units (EOUs) and Units located in Special Economic Zones
(SEZs), Agri. Export Zones (AEZs), Electronic Hardware Technology Parks
(EHTPs), Software Technology Parks (STPs) and Bio-Technology Parks
(BTPs) shall be eligible for recognition as a status holder.

3.10.2

Status recognition depends upon export performance. An applicant shall be

Status Category

categorized as status holder upon achieving export performance indicated


in table below. The export performance will be counted on the basis of FOB
value of export proceeds realized during current plus previous three years
(taken together).For Export House (EH) Status, export performance is
necessary in at least two out of four years.

Status Category

3.10.3
Double
Weightage and
other conditions
for Grant of
Status

Export Performance FOB / FOR Valu


(Rupees in Crores)

Export House (EH)

20

Star Export House (SEH)

100

Trading House (TH)

500

Star Trading House (STH)

2500

Premier Trading House (PTH)

7500

(a) Exporters in Small Scale Industry (SSI) / Tiny Sector / Cottage Sector,
Units registered with KVICs / KVIBs, Units located in North Eastern States,
Sikkim and Jammu & Kashmir, Units exporting handloom/handicrafts / hand
knotted or silk carpets, exporters exporting to countries in Latin America /
CIS / sub-Saharan Africa as listed in Appendix-9, Units having ISO 9000
(series) / ISO 14 000 (series) / WHOGMP/ HACCP / SEI CMM level-II and
above status granted by agencies listed in Appendix-6 of HBP v1, exports
of services and exports of agro products shall be entitled for double
weightage on exports made for grant of status. Double Weightage shall be
admissible to Merchant as well as Manufacturer Exporters. However, a
shipment can get double weightage only once in any one of above
categories.
(b) Transfer of export performance from one to another is not permitted.
Therefore disclaimer system shall not be allowed for counting of export
turnover.
(c) Exports made on re-export basis shall not be counted for recognition.
(d) Exports made by subsidiary of a limited company shall be counted
towards export performance of limited company for recognition only if
limited company has a majority share holding in subsidiary company.

3.10.4
Privileges of
Export and
Trading Houses
Status Holders

A Status Holder shall be eligible for privileges as under:


(a) Authorization and Customs Clearances for both imports and exports on
self-declaration basis;
(b) Fixation of Input-Output norms on priority within 60 days;
(c) Exemption from compulsory negotiation of documents through banks.
Remittance / Receipts, however, would be received through banking
channels;

(d) Exemption from furnishing of BG in Schemes under FTP;


(e) SEHs and above shall be permitted to establish Export Warehouses, as
per DoR guidelines.
(f) For status holders, a decision on conferring of ACP Status shall be
communicated by Customs within 30 days from receipt of application with
Customs.
(g) As an option, for Premier Trading House (PTH), the average level of
exports under EPCG Scheme shall be the arithmetic mean of export
performance in last 5 years, instead of 3 years.
(h) Status Holders of specified sectors shall be eligible for Status Holder
Incentive Scrip under Para 3 .16 of FTP.
(i) Status Holders of Agri. Sector (Chapter 1 to 24 ) shall be eligible for Agri.
Infrastructure Incentive Scrip under VKGUY - Para 3.13.4 of FTP
3.11

SERVICES EXPORTS

3.11.1
(a) All 161 tradable services covered under General Agreement on Trade in
Services Exports Services (GATS) are listed in Appendix 10 of HBP v1. If consideration is
received in free foreign exchange, these would be considered as service
exports.
(b) All provisions of this Policy shall apply mutatis mutandis to export of
services as they apply to goods.
3.11.2
Registration cum
Membership
Certificate
(RCMC) for
Service Providers

Software exporters shall register themselves with Electronics and Software


EPC. Exporters of 14 specific services listed at Sl. No. 22 of Appendix 2 of
HBPv1 are required to register themselves with Services EPC. Other
service exporters shall register themselves with Federation of Indian Export
Organisations (FIEO).

3.11.3
Government shall promote establishment of Common Facility Centers, in
Common Facility State and District level towns, for use by home-based service providers,
Centers
particularly in areas like Engineering & Architectural Design, Multi-media
operations, Software developers etc. to draw in a vast multitude of homebased professionals into services export arena.
3.12

SERVED FROM INDIA SCHEME (SFIS)

3.12.1
Objective

Objective of SFIS is to accelerate growth in export of services so as to


create a powerful and unique Served From India brand, instantly

recognized and respected world over.


3.12.2
Eligibility

Indian Service Providers, of services listed in Appendix 41 of HBPv1, who


have free foreign exchange earning of at least Rs. 10 lakhs in current
financial year will be eligible for Duty Credit Scrip. For Individual Indian
Service Providers, minimum free foreign exchange earnings would be Rs 5
Lakhs.

3.12.3
Services and Service Providers as listed in Para 3.6.1 of HBPv1 shall not
Ineligible
be entitled for benefits under the SFIS scheme.
Services and
Service Providers
3.12.4
Entitlement

Service Providers of services listed in Appendix 41 of HBPv1 would alone


be eligible. Such eligible service providers will be entitled to Duty Credit
Scrip equivalent to 10% of free foreign exchange earned during current
financial year (w.e.f 1.1.2011). For services rendered prior to 1.1.2011,
Appendix 10 of HBPv1 would be applicable.

Notification
03 (RE - 2013) /
2009 - 2014

3. The following is added at the end of Para 3.12.4 of FTP 2009-14:


"SFIS benefit will be allowed on the Net Foreign Exchange earned."
Date Time-18/04/2013

3.12.5
Eligible
Remittances

Free foreign exchange earned through International Credit Cards and


through any instrument as permitted by RBI for rendering of services shall
also be taken into account for computation of Duty Credit Scrip.

3.12.6
Imports Allowed

(a) Duty Credit Scrip may be used for import of any capital goods including
spares, office equipment and professional equipment, office furniture and
consumables; that are otherwise freely importable and / or restricted under
ITC (HS). Imports shall relate to any service sector business of applicant.
(b) Utilization of Duty Credit Scrip shall be permitted for payment of duty in
case of import of only those vehicles, which are in the nature of
professional equipment to the service provider.
(c) Duty Credit Scrip in case of hotels, clubs having residential facility of
minimum 30 rooms, golf resorts and stand-alone restaurants having
catering facilities, may also be used for import of consumables including
food items and alcoholic beverages.

Notification
03 (RE - 2013) /

4. Following is added at the end of Para 3.12.6(a) of FTP 2009-14:

2009 - 2014

Service providers who are also engaged in manufacturing activity can use
their SFIS scrip for importing / domestic sourcing of capital goods( as
defined in para 9.12 of FTP) including spares related to the manufacturing
sector business of the service provider. Such manufacturing sector
business of the service provider would have to be endorsed on the SFIS
scrip from relevant RA.
5. The following is added at the end of existing Para 3.12.6 (b) of FTP
2009-14:
Utilisation of Duty Credit Scrip shall also be permitted for payment of duty
in case of Import/ domestic sourcing of motor cars, SUVs and all purpose
vehicles as Professional Equipment by Hotels, Travel agents, Tour
operators or tour transport operators and companies owning/operating golf
resorts. Such vehicles (operating on road and requiring registration) will
have to be registered for Tourist purpose only. Proof of registration will
need to be submitted to RA concerned within 6 months of import/domestic
procurement.
Date Time-18/04/2013

3.12.7
Entitlement /goods (imported / procured) shall be non transferable (except
N
o
n within group company and managed hotels) and be subject to Actual User
T r a n s f e r a b i l i t y condition.
Notification
30 (RE - 2013)/
2009-14
Amendments in
Para 3.12.7 of
Foreign Trade
Policy 2009-14
regarding SFIS

S.O.(E) In exercise of the powers conferred by Section 5 of the Foreign


Trade (Development and Regulation) Act, 1992 read with Para 2.1 of the
Foreign Trade Policy, 2009-2014, the Central Government hereby makes
the following amendments in the Foreign Trade Policy (FTP) 2009-14 with
immediate effect:
2. Paragraph 3.12.7 of FTP is amended to read as under:
Existing Paragraph
: Entitlement/goods (imported / procured) shall be non transferable (except
within group company and managed hotels) and be subjected to Actual
User condition.
Amended Paragraph
:
Entitlement/goods (imported / procured) shall be non transferable (except
within group company and managed hotels) and be subjected to Actual
User condition. However, these goods can be alienated on completion of 3
years from the date of import / procurement.
Effect of this Notification
: Goods imported / procured against SFIS scrips can be alienated on
completion of 3 years from the date of import / procurement.

(Anup K. Pujari)
Director General of Foreign Trade
E-mail: dgft@nic.in
Date Time-01/08/2013
3.12.8
Procurement from
Domestic
Sources

Duty Credit Scrip shall be permitted to be utilised for payment of excise


duty in terms of DoR notification issued in this behalf for procurement from
domestic sources, in respect of items permitted for imports under SFIS
Duty Credit Scrip.

3.13

VISHESH KRISHI AND GRAM UDYOG YOJANA (VKGUY) (SPECIAL


AGRICULTURE AND VILLAGE INDUSTRY SCHEME)

3.13.1
Objective

Objective of VKGUY is to compensate high transport costs and offset other


disadvantages to promote exports of the following products :
(i) Agricultural Produce and their value added products;
(ii) Minor Forest Produce and their value added variants;
(iii) Gram Udyog Products;
(iv) Forest Based Products; and
(v) Other Products, as notified from time to time.

3.13.2
Entitlement

(a) Products listed in Appendix 37A of HBPv1, shall be entitled for Duty
Credit Scrip equivalent to 5 % of FOB value of exports (in free foreign
exchange) for export made from 27.8.2009 onwards, unless a specific date
of export/period is specified by a public notice/notification.
(b) However, for exports made w.e.f 27.8.2009 (unless a specific date of
export/ period is specified by a public notice/ notification), some Flowers
and Fruits, as listed in Table 1 of Appendix 37A shall be entitled to an
additional Duty Credit Scrip equivalent to 2 % of FOB value of exports; over
and above the 5 % or 3 % reduced rate VKGUY entitlement as per para
3.13.3 below.

Notification
03 (RE - 2012) /
Inserted vide Public Notice No. 03(RE-2012)/2009-2014 dated 05/06/2012
2009 - 2014
1. In Appendix 37A of Vishesh Krishi and Gram Udyog Yojana (VKGUY),
Amendments in
the following products are deleted from Table 2 with immediate effect:
the
H S Items
Reward/Incentive S l . N o . / V K G U Y I T C
Table
Product Code
Schemes of
Code
Chapter 3 of
Foreign Trade
Policy 2009-14 Appendix 37A,

Appendix 37C
and Appendi

4/Table 2

120740

SESAMUM SEEDS

31/Table 2

31

15162039

OTHER HYDROGENATED
CASTOR OIL (OPL WAX)

102/Table 2

102

13023210

GUAR MEAL

103/Table 2

103

13023220

GUAR GUM REFINED SPLIT

104/Table 2

104

13023230

GUAR GUM TREATED AND


PULVERISED

2. In Appendix 37A of Vishesh Krishi and Gram Udyog Yojana (VKGUY),


the following products are added in Table 2 for export made with immediate
effect:
Sl. No. / V K G U Y I T C
H S Items
Table
Product C o d e
Code
794

794

795

795

20081910

21061000

Admissible
Rate

ROASTED CASHEW
KERNELS

5%

P R O T E I
CONCENTRATES
T E X T U R E
P R O T E I
SUBSTANCE

5%

N
&
D
N
S

Date Time-05/06/2012
04 (RE - 2012)/
2009-2014
Amendments in
the Vishesh
Krishi and Gram
Udyog Yojana
(VKGUY) of
Chapter 3 of
Foreign Trade
Policy 2009-14-

Inserted vide Public Notice No. 04(RE-2012)/2009-2014 dated 08/06/2012


In exercise of powers conferred under paragraph 2.4 of the Foreign Trade
Policy 2009-2014, the Director General of Foreign Trade hereby makes the
following amendments in the Handbook of Procedures (Vol. I) (Appendices
and Aayat Niryat Forms) 2009-2014:
2.
In Appendix 37A of Vishesh Krishi and Gram Udyog Yojana
(VKGUY), the following product is added in Table 2 for export made with
immediate effect:
Sl. No. / Table V K G U Y I T C

H S Items

Admissib

Appendix 37A of
Hand

P r o d u c t Code
Code
796

796

04021010 Skimmed Milk Powder

le Rate

5%

Date Time-08/06/2012
Public Notice No.
52(RE-2013)/200914
Revision in
Appendix 37 A
and 37 D of
Handbook of
Procedure
Volume I.

(Inserted vide Public Notice No. 52(RE-2013)/2009-14 dated 25th February


2014)
In exercise of the powers conferred under Paragraph 2.4 of the Foreign
Trade Policy, 2009-14, the Director General of Foreign Trade hereby
notifies revised Appendix 37 A and 37 D of the Handbook of ProcedureVolume-I (Appendices and Aayat Niryat Forms). This shall come into force
with immediate effect.
2. Product description and ITC HS codes of items mentioned in Appendix
37-A and 37-D of HBP v1 have been harmonised.
(Anup K. Pujari)
Director General of Foreign Trade
E-mail: dgft@nic.in
(F. No. 01/61/180/230/AM13/PC-3)
Explanation: As a result of harmonization (a) serial number against some
items have undergone changes and (b) new ITC HS codes have replaced
old and outdated ITC HS codes. It is emphasized that this is only an
exercise to align / harmonize and hence there has been no addition /
deletion in entitlement. Grant of benefit may be considered if product
description is accurate even though ITC HS code mentioned in shipping bill
is the earlier ITC HS code (the old one that is being replaced now).
Date Time-25/02/2014

07 (RE - 2012) /
2009-2014
Amendments in
the Vishesh
Krishi and Gram
Udyog Yojana
(VKGUY) and
Focus Product
Scheme (FPS) of
Chapter 3 of
Foreign Trade

Insertd vide Public Notice No. 07(RE-2012)/2009-2014 dated 26/06/2012


In exercise of powers conferred under paragraph 2.4 of the Foreign Trade
Policy 2009-14, the Director General of Foreign Trade hereby adds a Note
in Appendices 37A and 37D of the Handbook of Procedures (Vol. I)
(Appendices and Aayat Niryat Forms) 2009-14.
The following Note is added in Appendix 37A of Handbook of Procedures
(Vol. I) (Appendices and Aayat Niryat Forms) below Table 1 & Table 2 and
in Appendix 37D of Handbook of Procedures (Vol. I) (Appendices and
Aayat Niryat Forms) below Table 1 & Table 2 for export made with effect
from 5th June, 2012:

Poli

Note: Export of product listed in Table 1 & Table 2 above through any of
the Land Custom Stations (LCSs) situated in the States of Arunachal
Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Tripuraand
Sikkim shall be entitled for additional Duty Credit Scrip @ 1% of FOB
value.
2.
Effect of this Public Notice: Export of the specified products
through all Land Custom Stations of North Eastern Region and Sikkim are
entitled for additional 1% Duty Credit Scrip.Date Time-26/06/2012

3.13.3
Applicability of
Reduced Rate

DELETED (vide Notification No. 03 (RE-2013)/ 2009-14 dated 18th April


2013)

3.13.4
Agri.
Infrastructure
Incentive Scrip

(a) Status Holders (having status recognition for the current year) exporting
products covered under ITC HS Chapters 1 to 24 , shall be granted Duty
Credit Scrip equal to 10% of FOB value of agricultural exports (including
VKGUY benefits entitled under Policy Para 3.13.2) for exports made during
a particular year. This shall be subject to the condition that the total benefits
for all status holders put together does not exceed Rs 100 Cr (i.e. Rs 50 Cr
for each half year) and the conditions specified in Para 3.7.2 of HBPv1 are
satisfied.
(b) Zonal Office, CLA, New Delhi shall be the licensing office for grant of
Duty Credit Scrip to all status holders under this para.
(c) The following capital goods / equipments shall be permitted for import:
(i) Cold storage units (including Controlled Atmosphere (CA) and Modified
Atmosphere (MA) Stores); Precooling Units and Mother Storage Units for
Onions, etc.;
(ii) Pack Houses (including facilities for handling, grading, sorting and
packaging etc.); for items notified in Appendix 37 F.
(iii) Reefer Van / Containers; and
(iv) Other Capital Goods / Equipment as may be notified in Appendix 37 F.
(d) Imported capital goods/equipment shall be utilized for storage, packing
etc. (as in (ii) above) and transportation of agricultural products (including
agro- processed perishable products).
(e) This additional benefit shall be subject to actual user condition and
hence non-transferable.

(f) For import of Cold Chain Equipment this Scrip shall be freely
transferable amongst Status Holders as well as to Units (the term Units
shall not include Developers) in the Food Parks.
(g) Transferability of the Agri Infrastructure Incentive Scrip shall be allowed
to supporting manufacturer of the Status Holder. Such transferability would
have to be endorsed on the Agri Infrastructure Incentive Scrip from relevant
RA.
Notification
03 (RE - 2013) /
2009 - 2014

7.

Sub para (g) is added at the end of para 3.13.4 of FTP:

Transferability of the Agri Infrastructure Incentive Scrip shall be allowed to


supporting manufacturer of the status holder. Such transferability would
have to be endorsed on the Agri Infrastructure Incentive Scrip from relevant
RA.
Date Time-18/04/2013
3.14

FOCUS MARKET SCHEME (FMS)

3.14.1
Objective

Objective of FMS is to offset high freight cost and other externalities to


select international markets with a view to enhance Indias export
competitiveness in these markets.

3.14.2
Entitlement

(a) Exporters of all products to countries notified in Table 1 and 2 of


Appendix 37C of HBPv1 shall be entitled for Duty Credit Scrip equivalent to
3 % of FOB value of exports (in free foreign exchange) for exports made
from 27.8.2009 onwards, unless a specific date of export/period is specified
by a public notice/notification.
(b) Export of products to countries notified in Table 3 of Appendix 37 C of
HBP v1 will be entitled for additional Duty Credit Scrip @ 1% of FOB value
of exports (in free foreign exchange) for export made with effect from
01.04.2011.

Notification
03 (RE - 2012) /
2009 - 2014
Amendments in
t
h
e
Reward/Incentive
Schemes of
Chapter 3 of
Foreign Trade
Policy 2009-14 -

Inserted vide Public Notice No. 3 (RE-2012)/ 2009-2014 dated 05/06/2012


7. The following markets are added in Table 2 of Appendix 37C (Focus
Market Scheme), for export made with immediate effect:
TABLE-2 NEW FOCUS MARKET
Sl. No.

30

Focus Market Code

30

Country Code

DZ

Country

Algeria

Appendix 37A,
Appendix 37C
and Appendi

31

31

Aruba
AW

32

32

AT

Austria

33

33

KH

Cambodia

34

34

MM

Myanmar

35

35

AN

Netherland

36

36

UA

Ukraine

8.
The following markets are added in Table 3 of Appendix 37C, for
export made with immediate effect:
TABLE-3 SPECIAL FOCUS MARKET
Sl. No.

Focus Market Code

Country Code

42

9.

Country
CHILE

L03

CL

43

L07

UY

URUGUAY

44

L10

SV

EL SALVAD

45

L11

GT

GUATEMAL

46

L15

HN

HONDURA

47

L24

BZ

BELIZE

48

A30

MA

MOROCCO

In Appendix 7, the following Towns of Export Excellence are added:

Sl. No.

T o w n o f E x p o r t State
Excellence

P r o d u c t
C a t e g o r y

28

AHMEDABAD

GUJARAT

TEXTILES

29

KOLHAPUR

MAHARASHTRA

TEXTILES

30

SAHARANPUR

UTTAR PRADESH

HANDICRAFTS

Date Time-05/06/2012
3.14.3
The following categories of export products / sectors shall be ineligible for
Ineligible Exports Duty Credit Scrip, under FMS:
Categories /
Sectors for FMS (i) Supplies made to SEZ units;
(ii) Service Exports;
(iii) Diamonds and other precious, semi precious stones;
(iv) Gold, silver, platinum and other precious metals in any form, including
plain and studded Jewellery;
(v) Ores and Concentrates, of all types and in all forms;
(vi) Cereals, of all types;
(vii) Sugar, of all types and in all forms;
(viii) Crude / Petroleum Oil & Crude / Petroleum based Products covered
under ITC HS codes 2709 to 2715, of all types and in all forms; and
(ix) Export of Milk and Milk Products covered under ITC HS Codes 0401 to
0406, 1 9011 001, 1 9011 010, 2105 & 3501.
Notification
43 (RE-2013) /
2009-14
Amendment in
Chapter 3 of
Foreign Trade
Policy

The following categories are added after serial no. (x) in the list appended
in paragraph 3.14.3 of Foreign Trade Policy bearing the Heading "Ineligible
Exports Categories/ Sectors for FMS":
(xi) Export of Cotton
(xii) Export of Cotton Yarn
(xiii) Exports which are subject to Minimum Export Price or Export Duty
Date Time-25/09/2013

27 (RE - 2012) /
2009-2014

2.The following sub para is added at the end of paragraph 3.14.3 of Foreign
Trade Policy under the Heading Ineligible Exports Categories / Sectors for
FMS:
(x) Export of Meat and Meat Products.
Date Time-28/12/2012

3.14.4

Inserted vide Notification No. 27 (RE-2012) / 2009-2014 dated

Incremental
E x p o r t s
Incentivisation
Scheme

28/12/2012
Incremental Exports Incentivisation Scheme
Objective
(a) The objective of the Scheme is to incentivize
incremental exports.
Entitlement
(b) An IEC holder would be entitled for a duty credit
scrip @ 2% on the incremental growth (achieved by the IEC holder) during
the period 01.01.2013 to 31.3.2013 compared to the period from
01.01.2012 to 31.3.2012 on the FOB value of exports. Incremental growth
shall be in respect of each exporter (IEC holder) without any scope for
combining the exports for Group Company.
(c)Incentive will be admissible only if the IEC holder
has achieved growth in the financial year 2012-2013 vis a vis financial year
2011-2012. Quantum of benefit will be calculated on the incremental growth
achieved subject to eligibility criteria given in para 3.14.4(d) of FTP 2009-14
.
Eligibility Criteria (d) For the purpose of the scheme, export performance
shall not be allowed to be transferred from any other IEC holder. Benefit
under this scheme will not be allowed to an exporter who had made no
export between 01/01/12 to 31/03/12 .The following exports shall not be
taken into account for calculation of export performance or for computation
of entitlement under the Scheme:
(i)
Export of imported goods or exports made through trans-shipment.
(ii)
Export from SEZ/ EOU /EHTP /STPI /BTP/FTWZ
(iii) Deemed Exports
(iv) Service Exports
(v)
Third Party exports
(vi)
Diamond, Gold, Silver, Platinum, other precious metal in any form
including plain and studded jewellery and other precious and semi-precious
stones.
(vii) Ores and concentrates of all types and in all formations.
(viii) Cereals of all types.
(ix) Sugar of all types and all forms.
(x)
Crude / petroleum oil and crude / primary and base products of all
types and all formulations.
(xi) Export of milk and milk products.
(xii) Export performance made by one exporter on behalf of other
exporter.
(xiii) Supplies made to SEZ units.
(xiv) Items, export of which requires an export authorisation (except
SCOMET), will not be considered.
(xv) Export of Meat and Meat Products.

(xvi) Exports to Singapore, UAE and Hong Kong.


Special Provision (e)The scheme is region specific and will cover exports
to USA, Europe and Asian countries only. Disclaimer provisions of para
3.17.10 (b) of FTP shall not be admissible.This benefit will be over and
above any benefit being claimed by the exporter under any of the Chapter 3
Schemes, therefore, provisions of para 3.17.8 of FTP 2009-14 will not be
invoked for such benefit.
Utilisation of Scrip (f) The duty credit scrip will be freely transferable. Such
scrips shall also be eligible for domestic sourcing as per para 3.17.5 of FTP
2009-14.
Notification
44 (RE-2013) /
2009-14
Amendment in
Chapter 3 of
Foreign Trade
Policy

The following sub-paragraphs (i) & (ii) are added below paragraph 3.14.4
(c) as under:
"(i) Benefit of Incremental Export Incentivisation Scheme for the last quarter
of 2012-13 will be limited to 25% growth or incremental growth of Rs. 10
crores in value, whichever is less.
(ii) Claims in excess of this value will be subjected to greater scrutiny by
Regional Authority."
Date Time-25/09/2013

27 (RE - 2012) /
2009-2014

3. A new paragraph is added at the end of Para 3.14.3 of FTP 2009-14 as


3.14.4:
3.14.4 Incremental Exports Incentivisation Scheme
Objective (a) The objective of the Scheme is to incentivize incremental
exports.
Entitlement (b) An IEC holder would be entitled for a duty credit scrip @
2% on the incremental growth (achieved by the IEC holder) during the
period 01.01.2013 to 31.3.2013 compared to the period from 01.01.2012 to
31.3.2012 on the FOB value of exports. Incremental growth shall be in
respect of each exporter (IEC holder) without any scope for combining the
exports for Group Company.
(c) Incentive will be admissible only if the IEC holder has achieved growth
in the financial year 2012-2013 vis a vis financial year 2011-2012. Quantum
of benefit will be calculated on the incremental growth achieved subject to
eligibility criteria given in para 3.14.4(d) of FTP 2009-14 .
Eligibility Criteria (d) For the purpose of the scheme, export performance
shall not be allowed to be transferred from any other IEC holder. Benefit
under this scheme will not be allowed to an exporter who had made no
export between 01/01/12 to 31/03/12 .The following exports shall not be
taken into account for calculation of export performance or for computation
of entitlement under the Scheme:
(i) Export of imported goods or exports made through trans-shipment.

(ii) Export from SEZ/ EOU /EHTP /STPI /BTP/FTWZ


(iii) Deemed Exports
(iv) Service Exports
(v) Third Party exports
(vi) Diamond, Gold, Silver, Platinum, other precious metal in any form
including plain and studded jewellery and other precious and semi-precious
stones.
(vii) Ores and concentrates of all types and in all formations.
(viii) Cereals of all types.
(ix) Sugar of all types and all forms.
(x) Crude / petroleum oil and crude / primary and base products of all types
and all formulations.
(xi) Export of milk and milk products.
(xii) Export performance made by one exporter on behalf of other exporter.
(xiii) Supplies made to SEZ units.
(xiv) Items, export of which requires an export authorisation (except
SCOMET), will not be considered.
(xv) Export of Meat and Meat Products.
(xvi) Exports to Singapore, UAE and Hong Kong.
Special Provision (e) The scheme is region specific and will cover exports
to USA, Europe and Asian countries only. Disclaimer provisions of para
3.17.10 (b) of FTP shall not be admissible. This benefit will be over and
above any benefit being claimed by the exporter under any of the Chapter 3
Schemes, therefore, provisions of para 3.17.8 of FTP 2009-14 will not be
invoked for such benefit.
Utilisation of Scrip (f) The duty credit scrip will be freely transferable. Such
scrips shall also be eligible for domestic sourcing as per para 3.17.5 of FTP
2009-14.
Date Time-28/12/2012
3.14.5
Incremental
Exports
Incentivisation
Scheme (IEIS) on
annual basis

Inserted vide Notification No. 3 (RE-2013) / 2009-2014 dated 18/04/2013


Incremental Exports Incentivisation Scheme (IEIS) on annual basis
Objective
(a) The objective of the Scheme is to incentivize
incremental exports.
Entitlement
(b) An IEC holder would be entitled for a duty credit
scrip @ 2% on the incremental growth (achieved by the IEC holder) during
the current year (for example, say for the period 01.04.2013 to 31.3.2014)
compared to the previous year (for example, say for the period from
01.04.2012 to 31.3.2013) on the FOB value of exports. Incremental growth
shall be in respect of each exporter (IEC holder) without any scope for
combining the exports for Group Company.

(c) Incentive will be admissible only if the IEC holder


has achieved growth in the financial year 2013-2014 vis a vis financial year
2012-2013. Quantum of benefit will be calculated on the incremental growth
achieved subject to eligibility criteria given in para 3.14.4(d) of FTP 2009-14
.
Eligibility Criteria (d) For the purpose of the scheme, export performance
shall not be allowed to be transferred from any other IEC holder. Benefit
under this scheme will not be allowed to an exporter who had made no
export during fiscal year 2011-12 and fiscal year 2012.13. The following
exports shall not be taken into account for calculation of export
performance or for computation of entitlement under the Scheme:
(i)
Export of imported goods or exports made through trans-shipment.
(ii)
Export from SEZ/ EOU /EHTP /STPI /BTP/FTWZ
(iii) Deemed Exports
(iv) Service Exports
(v)
Third Party exports
(vi)
Diamond, Gold, Silver, Platinum, other precious metal in any form
including plain and studded jewellery and other precious and semi-precious
stones.
(vii) Ores and concentrates of all types and in all formations.
(viii) Cereals of all types.
(ix) Sugar of all types and all forms.
(x)
Crude / petroleum oil and crude / primary and base products of all
types and all formulations.
(xi) Export of milk and milk products.
(xii) Export performance made by one exporter on behalf of other
exporter.
(xiii) Supplies made to SEZ units.
(xiv) Items, export of which requires an export authorisation (except
SCOMET), will not be considered.
(xv) Export of Meat and Meat Products.
(xvi) Exports to Singapore, UAE and Hong Kong.
Special Provision (e)The scheme is region specific and will cover exports
to USA, Europe and Asian countries only. In addition export to 53 countries
in Latin America and Africa (as mentioned in Public Notice 3 dated 18th
April 2013) will be entitled to this benefit. Disclaimer provisions of para
3.17.10 (b) of FTP shall not be admissible.This benefit will be over and
above any benefit being claimed by the exporter under any of the Chapter 3
Schemes.
Utilisation of Scrip (f) The duty credit scrip will be freely transferable. Such
scrips shall also be eligible for domestic sourcing and for payment of
Service Tax as per para 3.17.5 of FTP 2009-14.

Notification
03 (RE - 2013) /
2009 - 2014
Incremental
Exports
Incentivisation
Scheme (IEIS) on
annual basis

2. A new paragraph 3.14.5 of FTP 2009-14 is added as below


3.14.5 Incremental Exports Incentivisation Scheme (IEIS) on annual
basis
Objective
(a) The objective of the Scheme is to incentivize
incremental exports.
Entitlement
(b) An IEC holder would be entitled for a duty credit
scrip @ 2% on the incremental growth (achieved by the IEC holder) during
the current year (for example, say for the period 01.04.2013 to 31.3.2014)
compared to the previous year (for example, say for the period from
01.04.2012 to 31.3.2013) on the FOB value of exports. Incremental growth
shall be in respect of each exporter (IEC holder) without any scope for
combining the exports for Group Company.
(c) Incentive will be admissible only if the IEC holder
has achieved growth in the financial year 2013-2014 vis a vis financial year
2012-2013. Quantum of benefit will be calculated on the incremental growth
achieved subject to eligibility criteria given in para 3.14.4(d) of FTP 2009-14
.
Eligibility Criteria (d) For the purpose of the scheme, export performance
shall not be allowed to be transferred from any other IEC holder. Benefit
under this scheme will not be allowed to an exporter who had made no
export during fiscal year 2011-12 and fiscal year 2012.13. The following
exports shall not be taken into account for calculation of export
performance or for computation of entitlement under the Scheme:
(i)
Export of imported goods or exports made through trans-shipment.
(ii)
Export from SEZ/ EOU /EHTP /STPI /BTP/FTWZ
(iii) Deemed Exports
(iv) Service Exports
(v)
Third Party exports
(vi)
Diamond, Gold, Silver, Platinum, other precious metal in any form
including plain and studded jewellery and other precious and semi-precious
stones.
(vii) Ores and concentrates of all types and in all formations.
(viii) Cereals of all types.
(ix) Sugar of all types and all forms.
(x)
Crude / petroleum oil and crude / primary and base products of all
types and all formulations.
(xi) Export of milk and milk products.
(xii) Export performance made by one exporter on behalf of other

exporter.
(xiii) Supplies made to SEZ units.
(xiv) Items, export of which requires an export authorisation (except
SCOMET), will not be considered.
(xv) Export of Meat and Meat Products.
(xvi) Exports to Singapore, UAE and Hong Kong.
Special Provision (e)The scheme is region specific and will cover exports
to USA, Europe and Asian countries only. In addition export to 53 countries
in Latin America and Africa (as mentioned in Public Notice 3 dated 18th
April 2013) will be entitled to this benefit. Disclaimer provisions of para
3.17.10 (b) of FTP shall not be admissible.This benefit will be over and
above any benefit being claimed by the exporter under any of the Chapter 3
Schemes.
Utilisation of Scrip (f) The duty credit scrip will be freely transferable. Such
scrips shall also be eligible for domestic sourcing and for payment of
Service Tax as per para 3.17.5 of FTP 2009-14.
Date Time-18/04/2013
66 (RE-2013)/
2009-14
Allowing benefit
of IEIS to export
of cotton yarn in
FY 2013-14

S.O.(E) In exercise of the powers conferred by Section 5 of the Foreign


Trade (Development and Regulation) Act, 1992 read with Para 1.3 of the
Foreign Trade Policy, 2009-2014, the Central Government hereby makes
the following amendments in the Foreign Trade Policy (FTP) 2009-14 with
immediate effect:
2. The ineligible category (cotton yarn) inserted by Notification No. 43
dated 25th September, 2013 at serial number (xviii) of Para 3.14.5 (d) of
FTP 2009-14 stands deleted.
Effect of this Notification: Export of Cotton Yarn is made eligible for
benefits under Incremental Export Incentivisation Scheme for the entire
financial year 2013-14.
(Anup K. Pujari)
Director General of Foreign Trade
E-mail: dgft@nic.in
[Issued from File No. 01/61/180/188/AM13/PC3]
Date Time-23/01/2014

43 (RE-2013) /
2009-14
Amendment in
Chapter 3 of
Foreign Trade
Policy

The following sub-paragraphs are added below paragraph 3.14.5(c) as


under:
"(i) Benefit of Incremental Export INcentivisation Scheme for the year 201314 will be limited to a scrip of a value not exceeding Rs. 1 Crore per IEC.
(ii) Claims in excess of this value will be subjected to greater scrutiny by
Regional Authority."
The following ineligible categories are added after Sl. No. (xvi) in the

eligibility criteria specified in Paragraph 3.14.5(d) of FTP:


(xvii) Cotton
(xviii) Cotton Yarn
(xix) Exports which are subject to Minimum Export Price of Export Duty
Date Time-25/09/2013
3.15

FOCUS PRODUCT SCHEME (FPS)

3.15.1
Objective

Objective of FPS is to promote export of products which have high export


intensity / employment potential, so as to offset infrastructural inefficiencies
and other associated costs involved in marketing of these products.

3.15.2
Entitlement

(a) Export of products (listed in Table 1 of Appendix 37D of HBPv1) to all


countries (including SEZ units) shall be entitled for Duty Credit Scrip
equivalent to 2 % or 5% of FOB value of exports (in free foreign exchange)
for exports made from 27.8.2009 onwards, unless a specific date of
export/period is specified by public notice/notification.
(b) Certain Focus Product(s)/sector(s) listed in Appendix 37D shall be
granted bonus benefit in the form of an additional Duty Credit Scrip
equivalent to 2% of FOB value of exports (in free foreign exchange) over
and above the existing rate for that product/sector from the admissible date
of export/period specified in the public notice issued to notify the
product/sector.

Notification
03 (RE - 2012) /
Inserted vide Public Notice No. 03 (RE-2012)/2009-2014 dated 05/06/2012
2009 - 2014
3. The following products are added in Table 1 of Appendix 37D (Focus
Amendments in
Product Scheme) after Sl. No. 548 for export made with immediate effect:
the
Reward/Incentive TABLE 1:
S l . F P S ITC (HS) Description
R a t eBonus
Schemes of
N o . Product Code
PercentagBenefit
Chapter 3 of
Code
e
Foreign Trade
Policy 2009-14 Appendix 37A,
549 549
29051690 2-OCTANOL
2%
Appendix 37C
and Appendi
29141990
550

550

29171300 SEBACIC ACID

2%

551

551

28241010 LEAD OXIDE GREY

2%

552

552

28170010 ZINC OXIDE

2%

553

553

25010090 OTHER -INDUSTRIAL


SALT

2%

554

554

5810

EMBROIDERY FABRICS

2%

555

555

73141200 S T A I N L E S S S T E E L
WIRE CLOTH/MESH &
STAINLESS STEEL
D I A G O N A L
C L O T H / M E S H

2%

556

556

28220020 COBALT HYDROXIDE

2%

557

557

60062400 1 0 0 %
COTTON
K N I T T E D
O R
CROCHETED FABRICS

2%

558

558

60063100 K N I T T E D
O R
CROCHETED FABRICS
OF SYNTHETIC FIBERS
UNBLECHED AND
BLECHED

2%

559

559

60063200 K N I T T E D
O R
CROCHETED FABRICS
OF SYUNTHETIC
FIBERS DYED

2%

560

560

60064100 K N I T T E D
O R
CROCHETED FABRICS
OF ARTIFICIAL FIBRES
UNBLECHED AND
BLECHED

2%

561

561

60064200 K N I T T E D
O R
CROCHETED FABRICS
OF ARTIFICIAL FIBRES
DYED

2%

562

562

60064300 K N I T T E D
O R
CROCHETED FABRICS
OF ARTIFICIAL FIBRES
DYED

2%

563

563

5212

WOVEN COTTON
FABRICS

2%

564

564

63039100 C U R T A I N S
AND
INTERIOR BLINDS OF
COTTON NOT KNITTED
OR CROCHETED.

2%

565

565

63039290 C U R T A I N S
AND
INTERIOR BLINDS OF
SYNTHETIC FIBRE NOT
K N I T T E D
O R
C R O C H E T E D .

2%

566

566

63039990 C U R T A I N S
AND
INTERIOR BLINDS NOT
OF
COTTON OR
SYNTHETIC FIBRE NOT
K N I T T E D
O R
C R O C H E T E D .

2%

567

567

63049200 OTHER : FURNISHING


ARTICLES OF COTTON
NOT KNITTED OR
CROCHETED.

2%

568

568

63071090 FLOOR CLOTHES AND


SIMILAR CLEARNING
CLOTHES
NOT
K N I T T E D
O R
C R O C H E T E D .

2%

569

569

30066010 C O N T R A C E P T I V E
BASED ON HORMONES

2%

570

570

84713090 TABLET PC

2%

571

571

84733020 MOTHERBOARDS

2%

572

572

69022020 ALUMINA FUSED CAST


REFRACTORIES / HIGH
ALUMINA SHAPES

2%

573

573

84219900 OTHER : AUTOMOBILE


EXHAUST CATALYST

2%

574

574

38151290 O T H E R S : R E A C T I O N
INITIATORS, REACTION
ACCELERATORS &
CATALYTIC (CATALYST
METHANATION METH
134)

2%

575

575

38151900 OTHER SUPPORTED


CATALYSTS /G-1
CATALYST

2%

576

576

84213920 A I R P U R I F I E R S O R
CLEANERS/AUTOMOTI
V E
E X H A U S T
C A T A L Y T I C
C O N V E R T E R

2%

577

577

29330090 SECNIDAZOLE

2%

578

578

29332910 TINIDAZOLE

2%

579

579

29332920 M E T R O N I D A Z O L E /
METRONIDAZOLE
BENZOATE

2%

580

580

29241900 OTHER : ERUCAMIDE,


O L E A M I D E ,
B E H E N A M I D E ,
S T E A R Y L

2%

S T E A R A M I D E ,
STEARYL ERUCAMIDE
AND STEARAMIDE
581

581

40070010 O T H E R : R U B B E R
SHEETS/SHEETING/ST
RIPS/THREADS

2%

582

582

40082190 O T H E R :
HIGH
RESISTANCE TENSION
TAPE/SHEET

2%

583

583

940490

OTHERS : QUILTS,
C O M F O R T E R S ,
PILLOWS, CUSHIONS,
PILLOW FILLERS,
DUVET FILLERS

2%

584

584

30039033 CALCIUM SENNOSIDE


TABLETS/SENNOSIDE
TABLETS

2%

585

585

30042049 OTHER:MIRTAZIPINE
TABLETS

2%

586

586

30049033 RANITIDINE TABLETS

2%

587

587

30049039 OTHER:PANTOPRAIZO
LE TABLETS / DUVOID
T A B L E T S
(BETHANECHOL
CHLORIDE)

2%

588

588

30049063 IBUPROFEN TABLETS

2%

589

589

30049065 I N D O M E T H A C I N
CAPSULES / TABLETS

2%

590

590

30049074 M E T O P R O L O L
T A B L E T S

2%

591

591

73239420 UTENSILS

2%

592

592

73239490 OTHER HOUSEHOLD


ARTICLES OF IRON
N.E.S. (OTHER THAN
CAST
IRON)OR
STEEL,ENAMELLED

2%

593

593

82119390 OTHER KNIVES

2%

594

594

82149090 O T H R A R T I C L S O F
CUTLERY N.E.S.

2%

595

595

82151000 S E T S O F A S O R T D

2%

ARTICLS CONTNG ONE


ARTICLE PLATED WTH
PRECIOUS METAL
596

596

39076020 POLYESTER CHIPS

2%

597

597

73182100 S P R N G W A S H R S &
O T H R
L O C K
W A S H R S , N O N T H R A D D

2%

598

598

84433290 O T H E R : P A R T S O F
PRINTING MACHINERY
USED FOR PRINTING

2%

599

599

84799090 O T H E R : P A R T S O F
MACHINES
AND
M E C H A N I C A L
APPLIANCES FOR
WASHING

2%

600

600

96138090 O T H E R : P A R T S O F
LIGHTERS

2%

601

601

70181020 G L A S S C H A T O N S /

2%

MACHINE CUT GLASS


CHATONS FITTED
WITH CUPS
602

602

830241

OTHR MOUNTINGS
FITTINGS & SMLR
ARTCLS SUITABLE
FOR BUILDINGS

2%

603

603

94032010 S T E E L F U R N I T U R E FOLDING BED M/O


MILD STEEL ,IRONING
BOARD

2%

604

604

62149060 VISCOSE SHAWLS

2%

605

605

28254000 NICKEL HYDROXIDE

2%

606

606

28332400 NICKEL SULPHATE

2%

607

607

28369990 NICKEL CARBONATE

2%

608

608

87082900 OTHER BRAKES AND


SERVO-BREAKES AND
PARTS THEREON

2%

609

609

73251000 PISTON RING

2%

610

610

76169000 CYLINDER

2%

611

611

84099112 PISTON

2%

612

612

84099113 PISTON RING

2%

613

613

63021010 B E D
L I N E N ,
KNTD/CRCHTD OF
COTTON

2%

614

614

63024030 T A B L E L I N E N O F
C O T N ,
H A N D

2%

KNTD/CROCHETD
615

615

63029100 T O I L E T L I N E N A N D
KITCHEN LINEN OF
COTTON (EXCL OF
TERRY FABRICS,
FLOOR CLOTHS)

2%

616

616

63041910 BED SHEETS & BED


COVERS OF COTTON

2%

617

617

63041940 BED SHEETS AND BED


COVERS OF COTTON
HANDLOOM

2%

618

618

63049200 A R T I C L E S
FOR
INTERIOR FURNISHING
OF COTTON

2%

619

619

63049220 N A P K I N S O F C O T N ,
NTKNTD/CRCHTD

2%

620

620

63049230 PILLOW CASE & SLIP


O F
C O T N ,
NTKNTD/CRCHTD

2%

621

621

63049240 T A B L E C L O T H &
COVER OF COTN,
NTKNTD/CRCHTD

2%

622

622

63049241 T A B L E C L O T H A N D
TABLE
COVER,
MILLMADE

2%

623

623

63049260 TOWEL ORHT THAN


TERRY OF COTN,
NTKND/CRCHT

2%

624

624

63049280 CUSHION COVERS OF


C
O
T
N
,

2%

NKTNTD/CRCHTD
625

625

63049281 C U S H I O N C O V E R S ,
HANDLOOM, HAND
PRINTED

2%

626

626

63071010 FLOOR CLOTH, PIECE


CLOTHS, DUSTERS

2%

627

627

63071090 FLOOR CLOTHS, DISH


CLOTHS, DUSTERS
AND
SIMILAR
CLEANING CLOTHS,
OF ALL TYPES OF
TEXTILE MATERIAL

2%

628

628

63079020 MADE UPS ARTCLS OF


COTTON

2%

629

629

33019013 OLEORESIN PEPPER

2%

630

630

33012935 PEPPER OIL

2%

631

631

50072090 I T E M S O T H R T H N
SAREES CONTNG
>85% BY WT OF SLK
ETC

2%

632

632

520831 C O T N
FABRICS
CONTNG >=85%BY WT
OF COTN DYED PLAIN
WEAVE WEIGNG

2%

633

633

520832 C O T N
FABRICS
CONTNG>=85% BY WT
OF COTN DYED,PLAIN
WEAVE WEIGHNG
>=100 G/M2

2%

634

634

520931 DYED PLAIN WEAVE


COTTON FABRICS

2%

WEGHNG MORE THAN


200 GM PER SQM
635

635

520932 D Y E D 3 / 4 T H R E A D
TWILL INCLDNG
CROSS TWILL COTTON
F A B R I C S
WEIGHING>200 GM
PER SQM

2%

636

636

2401 U N M A N U F A C T U R E D
TOBACCO; TOBACCO
REFUSE

2%

637

637

73239990 O T H E R :
TABLE
KITCHEN AND OTHER
H O U S E H O L D
ARTICLES AND PARTS
THEREOF- CLOTH
RAILS,POWDER
COATED RACKS,STEP
LADDER,CLOTH
DRYER.

2%

638

638

73239390 O T H E R :
TABLE
K I T C H E N
ACCESSORIES MADE
OF STAINLESS STEELBOWL, COASTER,BAR
PRODUCTS,BEATERS
ETC

2%

639

639

73045910 TUBES/PIPES ETC OF


CIRCULAR CROSS
SECTION OUTER DIA
UPTO 114.3 MM,NT
CLD RLD

2%

640

640

73064000 O T H E R , W E L D E D , O F
CIRCULAR CROSS
S E C T I O N
O F

2%

STAINLESS STEEL
TUBES/PIPES
641

641

560750

TWINE,CORDAGE,CAB
LES OF OTHER
SYNTHETIC FIBER

2%

642

642

56090090 ALL TYPES OF ROPE


ARTICLES MADE OF
ROPE/TWINE

2%

643

643

56081900 A L L T Y P E S O F
NETTINGS INCLUDING
FISHING NETS MADE
OF
SYNTHETIC
ROPE/TWINE

2%

644

644

36050090 MATCH SKILLETS

5%

645

645

62141020 SHAWLS (EXCEEDING


60 CM) AND THE LIKEHANDPRINTED

5%

646

646

62142010 SHAWLS OF WOOL OR


FINE ANIMAL HAIR HANDPRINTED

5%

647

647

61171010 SHAWLS OF SILK

5%

648

648

61171040 SHAWLS OF MANMADE


FIBER

5%

649

649

650

650

15162039 O
T
H
E
R
HYDROGENATED
CASTOR OIL(OPL WAX)

2%

651

651

13023220 GUAR GUM REFINED


SPLIT

2%

652

652

13023230 GUAR GUM TREATED

2%

120740

SESAMUM SEEDS

2%

AND PULVARIZED
653

653

09042010 RED CHILLY

2%

4. The following products under Table 1 of Appendix 37D (Focus Product


Scheme) are entitled for bonus benefit (@ 2%) for export made with
immediate effect:
TABLE 1:
Sl. No. in F P S ITC (HS) Description
Table 1 Product Code
Code
314

314

74082190

ELECTRIC DISCHARGE MACHINE


WIRE (BRASS WIRE)

335

335

72024100

FERRO-CHROMIUM: CONTAINING BY
WEIGHT MORE THAN 4% OF CARBON

413

413

84729010

STAPLERS

415

415

83052000

STAPLES IN STRIPS

325

325

28332990

COBALT SULPHATE

326

326

28220010

COBALT OXIDE

231

231

73071120

IRON CAST FITTING

231

231

73259910

OTHER CAST ARTICLES OF IRON

449

449

283620

SODA ASH

5. The admissible rate for the following items is amended as 5% under


Table 1 of Appendix 37D (Focus Product Scheme) for export made with
immediate effect:
Sl. No. in
Table 1

ITC HS CODE

DESCRIPTION

220

350211

EGG ALBUMEN POWDER

213

36050010

SAFETY MATCHES

257

8518

PUBLIC ADDRESS SYSTEM

250

84749000

PARTS OF MACHINERY

171

701120

GLASS ENVELOPS FOR CATHODE-RAY TUB

506

507

39231020

42022910

WATCH BOX JEWELLERY BOX AND SIMILAR


OF PLASTICS

HANDBAGS OF OTHER MATERIALS EXCLUD


WORK OR BASKET WORK

508

42023110

509

42023910

510

58050010

HAND WOVEN TAPESTRIES HAND MADE


WORKED BY HAND, OF COTTON EMBR

511

58101000

EMBROIDERY IN THE PIECE, IN STRIPS OR


EMBROIDERY WITHOUT VISIBLE GROUND

512

58109210

513

58110010

514

58110020

QUILT WADDING EMBROIDERY

515

61043100

ENSAMBLES OF WOOL OR FINE ANI


CROCHETED

516

61171020

SHAWLS OF WOOL

517

64061010

518

67010010

JEWELLERY BOX SURFACE OF LEATHER

JEWELLERY BOX OTHER SURFACE OF LEA

EMBROIDERY BADGES, MOTIFS AND THE LI


KANTHA EMBROIDERY

EMBROIDERED UPPERS OF TEXTILES MATE


FEATHERS DUSTERS

519

68159990

520

70099200

OTHER GLASS MIRRORS, FRAMED

70134900

GLSSWR FR TBL KTCHN, TOLT, OFFC INDO


(EXCL GOODS OF HDG NO. NO 7010/7018)

521

522

OTHERS-OTHER ARTICLES OF STONES/OTH

70181090

OTHERS GLSS BEADS, IMTN PERLS, IMTN


PRCS STONES / SEMI PRCS STONES &
SMALLWARES
523

70189010

GLASS STATUE OF OTHR ARTCLE OF HDG 7

524

70200011

GLOBES FOR LAMPS & LANTERNS

525

70200029

526

92029000

527

92059010

528

92059090

OTHERS WIND MUSICAL INSTRUMENTS

92060000

PERCUSSION MUSICAL INSTRUMENTS (


XYLOPHONES, CYMBOLS, CASTENETS,

530

94051010

HANGNG LMPS COMPLETE FITNGS

531

94055010

532

97050090

529

OTHER GLS CHIMENEYS


OTHER STRING MUSICAL INSTRUMENTS
FLUTES

HURRICANE LANTERNS

OTHERS-COLECTNS & COLLECTRS


ZOOLOGICAL BOTANICAL, MINERALOGICL
H I S T O R I C A L
A R C H A E O
ETHNOGRAPHC/NUMSMATC

Date Time-05/06/2012
Public Notice No. (vide Public Notice No. 52 (RE-2013)/ 2009-14 dated 25th February 2014)

52 (RE-2013)/
2009-14
Revision in
Appendix 37 A
and 37 D of
Handbook of
Procedure
Volume I

In exercise of the powers conferred under Paragraph 2.4 of the Foreign


Trade Policy, 2009-14, the Director General of Foreign Trade hereby
notifies revised Appendix 37 A and 37 D of the Handbook of ProcedureVolume-I (Appendices and Aayat Niryat Forms). This shall come into force
with immediate effect.
2. Product description and ITC HS codes of items mentioned in Appendix
37-A and 37-D of HBP v1 have been harmonised.
(Anup K. Pujari)
Director General of Foreign Trade
E-mail: dgft@nic.in
(F. No. 01/61/180/230/AM13/PC-3)
Explanation: As a result of harmonization (a) serial number against some
items have undergone changes and (b) new ITC HS codes have replaced
old and outdated ITC HS codes. It is emphasized that this is only an
exercise to align / harmonize and hence there has been no addition /
deletion in entitlement. Grant of benefit may be considered if product
description is accurate even though ITC HS code mentioned in shipping bill
is the earlier ITC HS code (the old one that is being replaced now).
Date Time-25/02/2014

Public Notice No. In exercise of powers conferred under paragraph 2.4 of the Foreign Trade
07 (RE - 2012) /
Policy 2009-14, the Director General of Foreign Trade hereby adds a
2009-14
"Note" in Appendices 37A and 37D of the Handbook of Procedures (Vol. I)
(Appendices and Aayat Niryat Forms) 2009-14.
The following Note is added in Appendix 37A of Handbook of Procedures
(Vol. I) (Appendices and Aayat Niryat Forms) below Table 1 & Table 2 and
in Appendix 37D of Handbook of Procedures (Vol. I) (Appendices and
Aayat Niryat Forms) below Table 1 & Table 2 for export made with effect
from 5th June 2012:
"Note: Export of product listed in Table 1 & table 2 above through any of the
Land Custom Stations (LCSs) situated in the States of Arunachal Pradesh,
Assam, Manipur, Meghalaya, Mizoram, Nagaland, Tripura and Sikkim shall
be entitled for additional Duty Credit Scrip @ 1% of FOB value."
Effect of this Public Notice: Export of the specified products through all
Land Custom Stations of North Eastern Region and Sikkim are entitled for
additional 1% Duty Credit Scrip.
Date Time-26/06/2012
3.15.3

Market Linked Focus Products Scrip (MLFPS)


Export of Product/Sectors of high export intensity/ employment potential

(which are not covered under present FPS List) would be incentivized @ 2
% of FOB value of exports (in free foreign exchange) for exports made from
27.8.2009 onwards, unless a specific date of export/period is specified by
public notice/notification, under FPS when exported to the Linked Markets
(countries), which are not covered in the present FMS list. Such products
are listed in Table 2 of Appendix 37D of HBPv1.
Notification
Public Notice No.
52 (RE-2013)/
2009-14
Revision in
Appendix 37 A
and 37 D of
Handbook of
Procedure
Volume I

(vide Public Notice No. 52 (RE-2013)/ 2009-14 dated 25th February 2014)
In exercise of the powers conferred under Paragraph 2.4 of the Foreign
Trade Policy, 2009-14, the Director General of Foreign Trade hereby
notifies revised Appendix 37 A and 37 D of the Handbook of ProcedureVolume-I (Appendices and Aayat Niryat Forms). This shall come into force
with immediate effect.
2. Product description and ITC HS codes of items mentioned in Appendix
37-A and 37-D of HBP v1 have been harmonised.
(Anup K. Pujari)
Director General of Foreign Trade
E-mail: dgft@nic.in
(F. No. 01/61/180/230/AM13/PC-3)
Date Time-25/02/2014

71 (RE-2013)/
2009-14
Amendment in
Chapter 3 of FTP
2009-14

S.O.(E) In exercise of the powers conferred by Section 5 of the Foreign


Trade (Development and Regulation) Act, 1992 read with Para 1.3 of the
Foreign Trade Policy, 2009-2014, the Central Government hereby makes
the following amendments in the Foreign Trade Policy (FTP) 2009-14 with
immediate effect:
2. Para 3.15.3 of FTP 2009-14 is amended [Portion being added has been
marked in bold letters] to be read as under:
3.15.3 Market Linked Focus Products Scrip (MLFPS):
Export of Products/Sectors of high export intensity/employment potential
(which are not covered under present FPS List) would be incentivized @ 2
% of FOB value of exports (in free foreign exchange) under FPS when
exported to the Linked Markets (countries), which are not covered in the
present FMS list. Such products will be listed in Table 2 or Table 3 of
Appendix 37D of HBPv1, for exports made from 27.8.2009 onwards, unless
a specific date of export/period is specified by public notice/notification.
3.

Para 3.15.4 of FTP 2009-14 is inserted and would be read as under:

3.15.4
Incentive to the products listed in Table 3 will be in addition
to any benefit which the same item may be entitled to under Table 1 or
Table 2 of Appendix 37D.
Effect of this Notification: A new Table 3 has been added in Appendix 37 D
which would be entitled to additional benefits.
(Anup K. Pujari)
Director General of Foreign Trade
E-mail: dgft@nic.in
[Issued from File No. 01/91/180/820/AM12/PC3]
Date Time-27/02/2014
3.15.4

(Inserted vide Notification No. 71 (RE-2013)/ 2009-14 dated 27/2/2014


Incentive to the products listed in Table 3 will be in addition to any benefit
which the same item may be entitled to under Table 1 or Table 2 of
Appendix 37D.

3.16

Status Holders Incentive Scrip (SHIS)

3.16.1

(a) Objective of SHIS is to promote investment in upgradation of


technology.
(b) Status Holders of sectors specified in Para 3.16.4 below, shall be
entitled to a Duty Credit Scrip @1% of FOB value of exports made during
2009-10, 2010-11, 2011-12 and 2012-13.
(c) Status Holders of additional sectors listed in Para 3.10.8 of HBPv1
2009-14 (RE-2010) shall also be eligible for this Status Holders Incentive
Scrip on exports made during 2010-11, 2011-12 and 2012-13.
(d) This shall be over and above any Duty Credit Scrip claimed/availed
under this chapter.

3.16.2

Status Holders availing Technology Upgradation Fund Scheme (TUFS)


benefits (administered by Ministry of Textiles) during a particular year shall
not be eligible for Status Holders Incentive Scrip for exports of that year.

3.16.3

The Status Holders Incentive Scrip will be subject to actual user condition.
However transferability will be permitted amongst status holders subject to
the condition that the transferee status holder is a manufacturer. Status
Holder Incentive Scrip shall be used for import of capital goods (as defined
in FTP) relating to sectors specified in Para 3.16.4 below and para 3.10.8 of
HBP. Only in respect of CG imported earlier, upto 10% value of the Duty

Credit Scrip can be used for import of components, spares/parts of such


CG.
Notification
03 (RE - 2013) /
2009 - 2014

8.

Following is added at the end of Para 3.16.3 of FTP 2009-14:

SHIS can be transferred to a manufacturer group company of the scrip


holder even though the group company is not a status holder. Group
company is defined in para 9.28 of FTP. Such transfer will have to be
endorsed by relevant RA.
Date Time-18/04/2013
3.16.4

Status Holders of the following Sectors shall be eligible for the Status
Holders Incentive Scrip:
(i) Leather Sector (excluding finished leather);
(ii) Textiles and Jute Sector;
(iii) Handicrafts;
(iv) Engineering Sector (excluding Iron & Steel, Nonferrous Metals in
primary or intermediate forms, Automobiles & two wheelers, nuclear
reactors & parts and Ships, Boats and Floating Structures);
(v) Plastics; and
(vi) Basic Chemicals (excluding Pharma Products).

3.17
Common Provisions of Duty Credit Scrip, except where specifically
S p e c i a l provided for.
Provisions
3.17.1

(a) Government reserves the right in public interest, to specify export


products or services or exports to such countries, which shall not be eligible
for computation of entitlement.
(b) Further Government reserves the right to impose / change the rate /
ceiling on Duty Credit Scrip under this chapter.
(c) Similarly, Government may also notify goods (in Appendix 37B of
HBPv1), which shall not be allowed for import under Duty Credit Scrip.

3.17.10
(a) Transfer of export performance from one to another shall not be
Transfer of Export permitted. Thus, a shipping bill containing name of applicant shall be
Performance
counted in export performance / turnover of applicant only if export
proceeds from overseas are realized in applicants bank account and this
shall be evidenced from BRC / FIRC.
(b) However, for VKGUY, FMS and FPS (including MLFPS), benefits can

be claimed either by the supporting manufacturer (along with disclaimer


from the company /firm who has realized the foreign exchange directly from
overseas) or by the company / firm who has realized the foreign exchange
directly from overseas.
3.17.11
Duty Credit Scrip can also be utilised / debited for payment of Custom
Facility
o f Duties in case of EO defaults for Authorizations issued under Chapters 4
Payment
o f and 5 of this Policy. However, penalty / interest shall be required to be paid
Customs Duties in cash.
in case of E.O.
Duty credit scrips can be used for payment of composition fee under FTP,
defaults
for payment of application fee under FTP, if any and for payment of value
shortfall in EO under para 4.28 (b) of HBPv1 2009-14.
Notification
64 (RE-2013)/
2009-2014
Amendments in
Chapter 3 of
Foreign Trade
Policy 2009-14

S.O.(E) In exercise of the powers conferred by Section 5 of the Foreign


Trade (Development and Regulation) Act, 1992 read with Para 1.3 of the
Foreign Trade Policy, 2009-2014, the Central Government hereby makes
the following amendments in the Foreign Trade Policy (FTP) 2009-14 with
immediate effect:
2.
Para 3.17.11of FTP 2009-14 is amended [Portion being added has
been marked in bold letters] to be read as under:
3.17.11:
Duty Credit Scrip can be utilised / debited for payment of
Custom Duties in case of EO defaults for Authorizations issued under
Chapters 4 and 5 of this Policy. However, penalty / interest shall be
required to be paid in cash. Scrips issued under SHIS, SFIS and AIIS
cannot be utilised / debited for payment of Custom Duties in case of EO
defaults for Authorizations issued under Chapters 4 of this Policy. Duty
credit scrips can also be used for payment of composition fee under FTP,
for payment of application fee under FTP, if any and for payment of value
shortfall in EO under para 4.28 (b) of HBP v1 2009-14.
Effect of this Notification: SHIS, SFIS and AIIS scrips cannot be used for
payment of Custom duty for shortfall in EO in Advance Authorisation or
DFIA (i.e. default in EO for authorisation issued under Chapter 4 of Foreign
Trade Policy).
(Anup K. Pujari)
Director General of Foreign Trade
E-mail: dgft@nic.in
[Issued from File No. 01/61/180/123/AM13/PC3]
Date Time-06/01/2014

03 (RE - 2013) /
2009 - 2014

11. Following is added at the end of Para 3.17.11 of FTP 2009-14:

Duty credit scrips can be used for payment of composition fee under FTP,
for payment of application fee under FTP, if any and for payment of value
shortfall in EO under para 4.28 (b) of HBPv1 2009-14.
Date Time-18/04/2013
3.17.2
For VKGUY, FMS, FPS (including MLFPS) and Status Holders Incentive
Ineligible Exports Scrip, the following exports / categories/sectors shall be ineligible for Duty
C a t e g o r i e s / Credit Scrip entitlement:
Sectors
(i) DELETED vide Notification No. 03 (RE-2013)/ 2009-14 dated 18th April
2013;
(ii) Export of imported goods covered under Para 2 .35 of FTP;
(iii) Exports through transshipment, meaning thereby that exports
originating in third country but transshipped through India;
(iv) Deemed Exports;
(v) Exports made by SEZ units or SEZ products exported through DTA
units; and
(vi) Items, which are restricted or prohibited for export under Schedule-2 of
Export Policy in ITC (HS).
Notification
03 (RE - 2013) / 9.
Para 3.17.2 (i) of FTP 2009-14 stands deleted with immediate
2009 - 2014
effect.
Date Time-18/04/2013
3.17.3
FOB Value of Exports (in free foreign exchange) shall include up to 12.5%
C o u n t i n g o f Foreign Agency Commission for computation of Duty Credit Scrip Benefit.
Commission in
FOB value of
Exports (in free
foreign exchange)
3.17.4
(a) Duty Credit Scrip (FPS including MLFPS, FMS and VKGUY) and items
F
r
e
e imported against it would be freely transferable.
Transferability
(b) Duty Credit Scrip under SFIS (Para 3.12) shall not be freely
transferable.
(c) Status Holder Incentive Scrip shall not be transferable except as
permitted under Para 3.16.3 above.

3.17.5
Imports Allowed/
D o m e s t i c
Procurement

(a) Duty Credit Scrip may be used for import of inputs or goods including
capital goods, provided same is freely importable and / or restricted under
ITC (HS). However, import of items listed in Appendix 37B of HBPv1 shall
not be permitted to be debited.
(b) Duty Credit Scrip under Chapter 3 of FTP can also be utilized for
payment of duty against imports under EPCG scheme, provided the item is
importable against the Scrip.
(c) Duty Credit Scrip can also be utilised for payment of Excise Duty on
domestic procurement of such items as permitted to be imported under
respective scheme.
(d) Duty credit scrips issued under FPS, FMS and VKGUY can be used for
payment of Service Tax. Scrip holder shall be entitled to avail drawback
benefits or CENVAT credit of the Service Tax debited in the said scrip in
accordance with DOR rules.

Notification
03 (RE - 2013) / 10. Sub para (d) is added after 3.17.5(c):
2009 - 2014
(d) Duty credit scrips issued under FPS, FMS and VKGUY can be used for
payment of Service Tax. Scrip holder shall be entitled to avail drawback
benefits or CENVAT credit of the Service Tax debited in the said scrip in
accordance with DOR rules.
Date Time-18/04/2013
3.17.6
Additional customs duty/excise duty paid in cash or through debit under
C E N V A T
/ Duty Credit Scrip shall be adjusted as CENVAT Credit or Duty Drawback as
D r a w b a c k per DoR rules, except under SFIS.
3.17.7
TRA Facility

Utilization of Duty Credit Scrip for imports from a port other than port of
registration shall be allowed under Telegraphic Release Advice (TRA)
facility as per DoR notification.

3.17.8
Only one benefit under Chapter 3 schemes can be claimed by an exporter
E x c l u s i v i t y o f for a particular shipment.
Entitlement
Notification
27 (RE - 2012) / 4. The following is added at the end of para 3.17.8 of FTP 2009-14:
2009-2014
Benefit under para 3.14.4 of FTP will not be covered under this para.
Date Time-28/12/2012
3.17.9

Duty Credit Scrip can be utilised for payment of duty in case of import of

I m p o r t u n d e r capital goods under lease financing in terms of provision in Para 2.25 of


Lease financing FTP.
3.2
(a) Under MAI scheme, Financial assistance is provided for export
M a r k e t A c c e s s promotion activities on focus country, focus product basis. Financial
I n i t i a t i v e ( M A I ) assistance is available for Export Promotion Councils (EPCs), Industry and
Trade Associations (ITAs), Agencies of State Government, Indian
Commercial Missions (ICMs) abroad and other national level
institutions/eligible entities as may be notified.
(b) The activities that can be funded under MAI scheme include, amongst
others,
(i) Market studies/surveys,
(ii) Setting up of showroom / warehouse,
(iii) Participation in international trade fairs,
(iv) Displays in International departmental stores,
(v) Publicity campaigns,
(vi) Brand promotion,
(vii) Reimbursement of registration charges for pharmaceuticals and
expenses for carrying out clinical trials etc., in fulfillment of statutory
requirements in the buyer country,
(viii) Testing charges for engineering products abroad,
(ix) Assistance for contesting Anti Dumping litigations etc.
(c) Each of these export promotion activities can receive financial
assistance from Government ranging from 25% to 100% of total cost
depending upon activity and implementing agency. Full text of guidelines is
available at http://commerce.nic.in
3.3
M a r k e t i n g
Development
Assistance (MDA)

(a) Under MDA Scheme, financial assistance is provided for a range of


export promotion activities implemented by EPCs and Trade Promotion
Organizations on the basis of approved annual action plans. The scheme is
administered by DoC. Assistance includes, amongst others, participation in:
(i) Trade Fairs and Buyer Seller meets abroad or in India, and
(ii) Export promotions seminars.
(iii) Financial assistance with travel grant is available to exporters traveling
to focus areas, viz., Latin America, Africa, CIS region, ASEAN countries,
Australia and New Zealand. In other areas, financial assistance without
travel grant is available.
(b) MDA assistance is available for exporters having an annual export
turnover as prescribed in MDA guidelines. Full text of guidelines is available
at http://www.commerce.nic.in.

3.4
Meeting expenses
for statutory
compliances in
buyer country for
Trade Related
Matters

DoC may reimburse expenses/charges for fulfilling statutory requirements


in the buyer country, including registration charges for product registration
for pharmaceuticals, bio-technology and agro-chemicals products on
recommendation of EPCs. Financial assistance is also provided for
contesting litigation(s) in the foreign country concerning restrictions/anti
dumping duties etc. on product(s) of Indian origin, as provided under the
Market Access Initiative (MAI) Scheme of DoC. Guidelines are available at
http://www.commerce.nic.in.

3.5
(a) A number of towns have emerged as dynamic industrial clusters
Towns of Export contributing handsomely to Indias exports. It is necessary to grant
Excellence (TEE) recognition to these industrial clusters with a view to maximize their
potential and enable them to move up the value chain and also to tap new
markets.
(b) Selected towns producing goods of Rs. 750 Crore or more will be
notified as TEE based on potential for growth in exports. However for TEE
in Handloom, Handicraft, Agriculture and Fisheries sector, threshold limit
would be Rs 150 Crores. The following facilities will be provided to such
TEEs:
(i) Recognized associations of units will be provided financial assistance
under MAI scheme, on priority basis, for export promotion projects for
marketing, capacity building and technological services.
(ii) Common Service Providers in these areas shall be entitled for EPCG
scheme.
(iii) The projects received from TEEs shall be accorded priority by SLEPC
(State Level Export Promotion Committee) for financial assistance under
ASIDE.
(c) Notified Towns (TEEs) are listed in Appendix 7 of HBPv1.
Notification
Public Notice No. 9.
In Appendix 7, the following Towns of Export Excellence are added:
03 (RE - 2012) / Sl. No. T o w n o f E x p o r t State
P r o d u c t
2009 - 2014
Excellence
C a t e g o r y
28

AHMEDABAD

GUJARAT

TEXTILES

29

KOLHAPUR

MAHARASHTRA

TEXTILES

30

SAHARANPUR

UTTAR PRADESH

HANDICRAFTS

Date Time-05/06/2012

Public Notice No. The following Towns of Export Excellence (TEEs) have been added in
03 (RE-2013)/
Appendix 7 of HBP v1:
2009-14
Sl. No. T o w n o f E x p o r t State
Product Category
Excellence
31

MORBI

GUJARAT

CERAMIC TILES &


SANITARYWARE

32

GURGAON

HARYANA

APPAREL

Date Time-18/04/2013
3.6
(a) IBEF (originally called India Brand Equity Fund and later renamed as
Brand Promotion India Brand Equity Foundation) was set up by the Ministry of Commerce on
and Quality
11th July, 1996, with the primary objective to promote and create
international awareness of the Made in India label in markets overseas.
IBEF aims to promote India as a business opportunity by creating positive
economic perceptions of India globally as well as effectively present the
India business partnerships in a globalised market-place.
(b) DOC provides funds to national level Institutions and EPCs for capacity
building, up-gradation of quality, organizing training programs for skill
improvement of exporters for quality up-gradation, reduction in rejection
and product improvement etc. as provided under the Market Access
Initiative (MAI) Scheme of DOC.
Details are available at www.commerce.nic.in
3.7
Test Houses

Central Government will assist in modernization and up gradation of test


houses and laboratories to bring them at par with international standards.
Details of scheme are available at www.commerce.nic.in

3.8
Quality
Complaints/
Disputes

Regional Sub-Committee on Quality Complaints (RSCQC) set up at


Regional Offices of this Directorate shall investigate quality complaints
received from foreign buyers. Guidelines for settlement of quality and other
complaints, in general, are given in Appendix-16 of HBPv1

3.9
Trade Disputes
affecting Trade
Relations

(a) If anything comes to notice of DGFT or he has reason to believe that an


export or import has been made in a manner that
(i) is gravely prejudicial to trade relations of India with any other country;
and / or
(ii) is gravely prejudicial to interest of other persons engaged in exports or
imports; and / or
(iii) has brought disrepute to the country.
(b) DGFT may take action against such exporter or importer in accordance

with FT (D&R) Act, Rules and Orders made there-under and FTP.

CHAPTER-4
DUTY EXEMPTION / REMISSION SCHEMES
4.1
Duty Exemption
and Remission
Schemes

(a) Duty exemption schemes enable duty free import of inputs required for
export production. Duty Exemption Schemes consist of:
(i) Advance Authorisation; and
(ii) Duty Free Import Authorisation (DFIA).
(b) Duty Remission Scheme enables post export replenishment / remission
of duty on inputs used in export product. Duty remission schemes consist
of:
(i) Duty Entitlement Passbook (DEPB) Scheme (discontinued for exports
made on or after 1.10.2011); and
(ii) Duty Drawback (DBK) Scheme.

4.1.1
Re-import of
exported goods
under Duty
Exemption /
Remission
Scheme

Goods exported under Advance Authorisation / DFIA / DEPB may be reimported in same or substantially same form subject to conditions as may
be specified by DoR. The RA which has issued AA / DFIA /DEPB, should
also be kept informed of such re-importation within one month of the reimportation.

4.1.10
Advance
Authorisation for
Annual
Requirement

(a) Advance Authorisation can also be issued for annual requirement.


Imports are exempted from payment of basic customs duty, additional
customs duty, education cess, anti-dumping duty and safeguard duty, if
any.
(b) Exporters having past export performance (in atleast preceding two
years) shall be entitled for Advance Authorisation for annual requirement.
(c) Entitlement in terms of CIF value of imports shall be upto 300% of the
FOB value of physical export and / or FOR value of deemed export in
preceding licensing year or Rs 1 crore, whichever is higher.

4.1.11
Advance Release
Orders (ARO) and
Invalidation Letter

(a) Holder of Advance Authorisation, Advance Authorisation for annual


requirement and Duty Free Import Authorisation intending to source inputs
from indigenous sources / State Trading Enterprises in lieu of direct import
has option to source them either against Advance Release Order (ARO) or
Invalidation letter denominated in free foreign exchange / Indian rupees.
However, supplies may be obtained against Authorisation from EOU /

EHTP / BTP / STP / SEZ units, without conversion into ARO or Invalidation
letter.
(b) Transferee of DFIA shall also be eligible for ARO / invalidation letter
facility. Validity period of ARO shall be as prescribed in HBP v1.
4.1.12
Back-to-Back
Inland Letter of
Credit

Holder of Advance Authorisation, Advance Authorisation for Annual


Requirement and DFIA may, instead of applying for an ARO or Invalidation
letter, avail of the facility of Back-to-Back Inland Letter of Credit in
accordance with procedure specified in HBP v1.

4.1.13
Importability
/Exportability of
items that are
Prohibited /
Restricted/ STE

(a) No export or import of an item shall be allowed under Advance


Authorisation / DFIA if the item is prohibited for exports or imports
respectively.
(b) 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 permitted to issue No Objection Certificate (NOC)
for import by advance Authorisation / DFIA holder. Authorisation Holder
would be required to file Quarterly Returns of imports effected against such
NOC to concerned STE and STE would submit half-yearly import figures of
such imports to concerned administrative Department for monitoring with a
copy endorsed to DGFT.
(c) Items reserved for exports by STEs can be exported under Advance
Authorisation / DFIA only after obtaining a No Objection Certificate from
the concerned STE.
(d) Import of restricted items shall be allowed under Advance Authorisation
/ DFIA.
(e) Export of restricted / SCOMET items however, shall be subject to all
conditionalities or requirements of export Authorisation or permission, as
may be required, under Schedule 2 of ITC (HS).

Notification
51 (RE-2013) /
2009-14
Amendment of
Paragraph
4.1.13(a) of FTP

The amended paragraph will read as under (new words/ sentences being
added at the end of the para are in bold letters for easy reference):
Para 4.1.13 (a)
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.


Date Time-14/11/2013
4.1.14
In case of an Advance Authorisation, drawback shall be available for any
Admissibility of duty paid material, whether imported or indigenous, used in goods
Drawback
exported, as per drawback rate fixed by DoR, Ministry of Finance
(Directorate of Drawback). Drawback shall however, be allowed only for
such duty paid items which have been endorsed on Authorisation by RA.
4.1.15

Wherever SION permits use of either (a) a generic input or (b) alternative
inputs, unless the name of the specific input(s) [which has (have) been
used in manufacturing the export product] gets indicated / endorsed in the
relevant shipping bill and these inputs, so endorsed, match the description
in the relevant bill of entry, the concerned Authorisation will not be
redeemed. In other words, the name/description of the input used (or to be
used) in the Authorisation must match exactly the name/description
endorsed in the shipping bill. At the time of discharge of export obligation
(EODC) or at the time of redemption, RA shall allow only those inputs which
have been specifically indicated in the shipping bill."

Notification
31 (RE - 2013) / After para 4.1.14 of FTP a new para 4.1.15 is inserted.
2009-14
"4.1.15 Wherever SION permits use of either (a) a generic input or (b)
alternative inputs, unless the name of the specific input(s) [which has
(have) been used in manufacturing the export product] gets indicated /
endorsed in the relevant shipping bill and these inputs, so endorsed, match
the description in the relevant bill of entry, the concerned Authorisation will
not be redeemed. In other words, the name/description of the input used (or
to be used) in the Authorisation must match exactly the name/description
endorsed in the shipping bill. At the time of discharge of export obligation
(EODC) or at the time of redemption, RA shall allow only those inputs which
have been specifically indicated in the shipping bill."
Date Time-01/08/2013
90 (RE-2013) /
2009-14
Amendment in
Para 4.1.15 of FTP
2009-14

Para 4.1.15 of FTP, as inserted vide Notification No.31 dated 1.8.2013, is


amended to read as follows:
4.1.15 (a)
Wherever SION permits use of either (a) a generic input
or (b) alternative inputs, unless the name of the specific input(s) [which has
(have) been used in manufacturing the export product] gets indicated /
endorsed in the relevant shipping bill and these inputs, so endorsed, match
the description in the relevant bill of entry, the concerned Authorisation will
not be redeemed. In other words, the name/description of the input used (or
to be used) in the Authorisation must match exactly the name/description

endorsed in the shipping bill.

(b) In addition in case in any SION, a single quantity has been indicated
against number of inputs (more than one input), then quantities of such
inputs to be permitted for import shall be in proportion to the quantity of
these inputs actually used/consumed in production, within 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.

(c) At the time of discharge of export obligation (EODC) or at the time of


redemption, RA shall allow only those inputs which have been specifically
indicated in the shipping bill.
3. Effect of this Notification: Quantity of input to be allowed under
Advance Authorisation/DFIA shall be in proportion to the quantity of input
actually used/consumed in production.
Date Time-21/08/2014
48 (RE-2013)/
2009-14
Amendment in
Notification No.
31 (RE-2013)/
2009-14 dated
1/8/2013

In exercise of powers conferred by Section 5 of the Foreign Trade


(Development & Regulation) Act, 1992 (No. 22 of 1992),as amended, the
Central Government hereby amends para 2 of Notification No. 31 dated
1.8.2013 by adding two sentences at the end of the existing para.
The amended paragraph 4.1.15 will read as under: (new sentences being
added at the end of the para are in bold letters for easy reference)
4.1.15 Wherever SION permits use of either (a) a generic input or (b)
alternative inputs, unless the name of the specific input(s) [which has
(have) been used in manufacturing the export product] gets indicated /
endorsed in the relevant shipping bill and these inputs, so endorsed, match
the description in the relevant bill of entry, the concerned Authorisation will
not be redeemed. In other words, the name/description of the input used (or
to be used) in the Authorisation must match exactly the name/description
endorsed in the shipping bill. At the time of discharge of export obligation
(EODC) or at the time of redemption, RA shall allow only those inputs which
have been specifically indicated in the shipping bill. These 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 export documents/import documents/ documents for
domestic procurement.
Effect of this Notification: This Notification makes it explicit that provisions
of para 4.1.15 of FTP are applicable for supplies to SEZs and deemed
exports as well.

(Anup K. Pujari)
Director General of Foreign Trade
e-mail: dgft@nic.in
(Issued from F. No. 01/ 94 / 180 /165 / AM12 / PC-4)
Date Time-30/10/2013
4.1.2
Value Addition

Value addition (VA) for the purpose of this Chapter (Except for Gems and
Jewellery Sector) shall be:VA = (A - B)/B x 100, where
A = FOB value of export realised / 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

4.1.3.1
Advance
Authorisation

An Advance Authorisation is issued to allow duty free import of inputs,


which are physically incorporated in export product (making normal
allowance for wastage). In addition, fuel, oil, energy, catalysts which are
consumed / utilised to obtain export product, may also be allowed. DGFT,
by means of Public Notice, may exclude any product(s) from the purview of
Advance Authorisation.
Notification

02 (RE-2013)/
2009-2014

(2) The word energy in second sentence of para 4.1.3.1 of the FTP
stands deleted.
Date Time-18/04/2013

4.1.3.2

Mandatory spares which are required to be exported / supplied with the


resultant product can be allowed duty free but upto 10% of CIF value of
Authorisation.

4.1.3.3

Advance Authorisations are issued for inputs and export items given under
SION. These can also be issued on the basis of Adhoc norms or self
declared norms as per para 4.7 of HBP v1.

4.1.3.4

(a) Advance Authorisation can be issued either to a manufacturer exporter


or a merchant exporter tied to supporting manufacturer(s). However,
advance authorisation under paragraph 4.7A of HBP. v1 [for
pharmaceutical products manufactured through Non-Infringing (NI) process]
shall be issued to Manufacturer exporter only.
(b) Advance Authorisation shall be issued for:
(i) Physical exports (including exports to SEZ); and/or

(ii) Intermediate supplies; and/or


(iii) Such supply of goods that are allowed in Chapter 8 of the FTP;
(iv) Supply of stores on board of foreign going vessel / aircraft subject to
condition that there is specific SION in respect of item(s) supplied.
4.1.3.5

In addition, in respect of supply of goods to specified projects mentioned in


paragraph 8.2 (d), (f) and (j) of FTP, an Advance Authorisation can also be
availed by sub-contractor to such project provided name of sub
contractor(s) appears in main contract.

4.1.3.6

Such Authorisation can also be issued for supplies made to United Nations
Organisations or under Aid Programme of the United Nations or other
multilateral agencies; such supplies need to be paid for in free foreign
exchange.

4.1.3.7

However, Advance Authorization for import of raw sugar can be issued


either to a manufacturer exporter or merchant exporter tied to supporting
manufacturer(s). Exports can also be made by procurement of white sugar
from any other factory(ies). This provision shall be applicable for exports
from 17.02.2009.

4.1.4

Advance Authorisations are exempted from payment of basic customs duty,


additional customs duty, education cess, anti dumping duty and safeguard
duty, if any. However, imports for supplies covered under paragraph 8.2 (h)
& (i) will not be exempted from payment of applicable anti-dumping and
safeguard duty, if any.

4.1.5

(a) Advance Authorisation and / or materials imported thereunder will be


with actual user condition. It will not be transferable even after completion
of export obligation. However, Authorisation holder will have option to
dispose off product manufactured out of duty free inputs once export
obligation is completed. In case where CENVAT credit facility on inputs
have been availed for the exported goods, even after completion of export
obligation, the goods imported against Advance Authorisation shall be
utilized only in the manufacture of dutiable goods whether within the same
factory or outside (by a supporting manufacturer), for which the
authorisation holder shall produce a certificate from either the jurisdictional
Central Excise Superintendent or Chartered Accountant, at the option of the
exporter, at the time of filing application for EODC to RA concerned.
(b) Further the manufacturing wastes / scrap, as allowed, can be disposed
off with the payment of applicable duty even before fulfilment of export
obligation.

4.1.6

(a) Advance Authorisation necessitates exports with a minimum value

Minimum Value
Addition

addition of 15%, except for items specified in Appendix 11B of HBP v1 and
for items in Gems & Jewellery Sector, for which value addition would be as
per paragraph 4A.2.1 of HBP v1. Exports to SEZ Units / supplies to
Developers / Co-developers, irrespective of currency of realization, would
also be covered.
(b) For physical exports for which payments are not received in freely
convertible currency, same shall be subject to value addition as specified in
Appendix-11 of HBP v1.
(c) In case of Authorisation for import of Tea, minimum value addition under
Advance Authorisation shall be 50%.
(d) Similarly, in case of spices {covered by Chapter 9 of ITC(HS)}, duty free
import of spices shall be permitted only for value addition purposes like
crushing / grinding / sterilization or for manufacture of oils and oleoresins
and not for simple cleaning, grading, re-packing etc.

4.1.7
Validity

(a) Advance Authorisation shall be issued in accordance with Policy and


procedure in force on Authorisation issue date.
(b) Validity period of Advance Authorisation for import shall be as
prescribed in HBP v1.

4.1.8
Free of Cost
Supply by
Foreign Buyer

Facility of Advance Authorisation shall also be available where some or all


inputs are supplied free of cost to exporter by foreign buyer. In such cases,
for calculation of value addition, notional value of free of cost inputs along
with value of other duty-free inputs shall be taken into consideration.

4.1.9
Period for fulfillment of export obligation under Advance Authorisation shall
Export Obligation be as prescribed in HBP v1.
4.1.9 A
Provision for
BIFR units

Any firm / company registered with BIFR or any firm / company acquiring a
unit, which is under BIFR shall be allowed Export Obligation Period (EOP)
extension as per rehabilitation package prepared subject to approval of
BIFR or 5 years if not specified, without payment of composition fee. This
facility will also be made available to SSI units as per rehabilitation scheme
of concerned State government.

4.2.1
Scheme

DFIA is issued to allow duty free import of inputs, fuel, oil, energy sources,
catalyst which are required for production of export product. DGFT, by
means of Public Notice, may exclude any product(s) from purview of DFIA.

4.2.2
Entitlement

(a) Provisions of paragraph 4.1.3 shall be applicable in case of DFIA.


However, these Authorisations shall be issued only for products for which
Standard Input and Output Norms (SION) have been notified.

(b) DFIA shall be issued in accordance with Policy and procedure in force
on date of issue of Authorisation.
(c) In case of post export DFIA, a merchant exporter shall be required to
mention only name (s) and address(s) of manufacturer(s) of the export
product(s). Applicant is required to file application to concerned RA before
effecting exports under DFIA.
(d) Pre-export Authorisation shall be issued with actual user condition and
shall be exempted from payment of basic customs duty, additional customs
duty / excise duty, education cess, anti-dumping duty and safeguard duty, if
any.
(e) In case of actual user DFIA and where CENVAT credit facility on inputs
have been availed for the exported goods, even after completion of export
obligation, the goods imported against such DFIA shall be utilized in the
manufacture of dutiable goods whether within the same factory or outside
(by a supporting manufacturer).
4.2.3
Import items

Provisions of paragraphs 4.1.11, 4.1.12, 4.1.13 and 4.1.14 of FTP shall be


applicable for DFIA holder.
Notification

31 (RE - 2013) /
2009-14

Para 4.2.3 of FTP is being amended by adding the phrase "4.1.14 and
4.1.15" in place of "and 4.1.14". The amended para would be as under:
"Provisions of paragraphs 4.1.11, 4.1.12, 4.1.13, 4.1.14 and 4.1.15 of FTP
shall be applicable for DFIA holder."
Date Time-01/08/2013

4.2.4
Value Addition

A minimum 20% value addition shall be required for issuance of DFIA.


However, for items in gems and jewellery sector value addition as
prescribed under paragraph 4A.2.1 of HBP v1. shall apply. Similarly, for
items where a higher value addition has been prescribed under Advance
Authorisation Scheme, the same value addition for DFIA shall be applied.

4.2.5
Procedure and time period related to fulfillment of Export Obligation have
Export Obligation been laid down in Chapter 4 of HBP v1.
4.2.6
Transferability

(a) Once export obligation has been fulfilled, request for transferability of
Authorisation or inputs imported against it may be made before concerned
RA. Once transferability is endorsed, Authorisation holder may transfer
DFIA or duty free inputs, except fuel and any other item(s) notified by
DGFT. However, for fuel, import entitlement may be transferred only to
companies which have been granted authorisation to market fuel by

Ministry of Petroleum and Natural Gas.


(b) Wherever SIONs prescribe actual user condition and in case of Acetic
Anhydride, Ephedrine and Pseudo Ephedrine, DFIA shall be issued with
actual user condition for these inputs and no transferability shall be allowed
for these inputs even after fulfillment of export obligation.
(c) After endorsement of transferability, imports / domestic procurement
against authorisation or transfer of imported inputs / domestically procured
inputs shall be subject to payment of applicable additional customs duty /
excise duty. While endorsing transferability, authorisation would bear a note
as to liability of such additional customs duty / excise duty. However, in
case where CENVAT facility has not been availed, exemption from
additional customs duty / excise duty would be available even after
endorsement of transferability on DFIA.
(d) Exemption from Antidumping Duty and Safeguard Duty would be
available on actual user basis only, i.e. before endorsement of
transferability.
Notification
0 2 ( R E - 2 0 1 3 ) / (1) In Chapter 4 a new sub-para (d) after para 4.2.6(c) of FTP is being
2009-2014
inserted to disallow exemption from Antidumping duty and Safeguard duty
once a DFIA is made transferable. The sub para (d) to be inserted would
read as under:Exemption from Antidumping Duty and Safeguard Duty would be available
on actual user basis only, i.e. before endorsement of transferability.
Date Time-18/04/2013
4.2.7
CENVAT Facility

CENVAT credit facility shall be available for inputs either imported or


procured indigenously.

4.3
Duty Entitlement
P a s s b o o k
Scheme (DEPB)

Objective of DEPB is to neutralise incidence of customs duty on import


content of export product. Component of customs duty on fuel (appearing
as consumable in the SION) shall also be factored in DEPB rate.
Component of Special Additional Duty shall also be allowed under DEPB
(as brand rate) in case of non-availment of CENVAT credit. Neutralisation
shall be provided by way of grant of duty credit against export product. The
DEPB Scheme stands discontinued in respect of exports made on or after
1.10.2011.

4.3.1

(a) An exporter may apply for credit, at specified percentage of FOB value
of exports, made in freely convertible currency. In case of supply by a DTA
unit to a SEZ unit / SEZ Developer/Co- developer, an exporter may apply

for credit for exports made in freely convertible currency or payment made
from foreign currency account of SEZ Unit/SEZ Developer/Co-Developer. In
addition, the exporter shall also be entitled for DEPB benefit in case
payment is made in Indian Rupees by SEZ Developer/Co-Developer for
supplies received w.e.f 10.2.2006.
(b) Credit shall be available against such export products and at such rates
as may be specified by DGFT by way of Public Notice. Credit may be
utilized for payment of Customs Duty on freely importable items and/or
restricted items. DEPB Scrips can also be utilized for payment of duty
against imports under EPCG Scheme. Further, DEPB Scrips can also be
used / debited towards payment of Customs Duty in case of E.O. defaults
for authorizations issued under Chapters 4 and 5 of this policy. However,
penalty / interest shall be required to be paid in cash.
(c) Prohibited items of exports mentioned in ITC(HS) Book (as amended
from time to time) shall not be entitled for DEPB credit except for the
exports effected under transitional facility, wherever allowed, in terms of
paragraph 1.5 of FTP.
4.3.2

DEPB holder shall have option to pay additional customs duty in cash as
well.

4.3.3
Validity

Validity period of DEPB for import shall be as prescribed in HBP v1.

4.3.4
Transferability

(a) DEPB and / or items imported against it are freely transferable. Transfer
of DEPB shall however be for import at specified port, which shall be the
port from where exports have been made.
(b) Imports from a port other than the port of export shall be allowed under
TRA facility as per terms and conditions of DoR notification.

4.3.5
Additional customs duty / Excise Duty and Special Additional Duty paid in
Applicability of cash or through debit under DEPB may also be adjusted as CENVAT
Drawback
Credit or Duty Drawback as per DoR rules.
4A
Exporters of gems and Jewellery can import / procure duty free inputs for
Scheme for Gems manufacturing.
and Jewellery
4A.1
(a) Exporters may obtain Replenishment (REP) Authorisations from RA in
R e p l e n i s h m e n t accordance with procedure specified in HBP v1.
Authorisation
(b) Replenishment authorisation may also be for consumables as per
paragraph 4A.28 of HBP v1.

4A.10
An Advance Authorisation may be granted for duty free import of:
Export Against
A d v a n c e (i) Gold of fineness not less than 0.995 and mountings, sockets, frames and
A u t h o r i s a t i o n findings of 8 carats and above;
(ii) Silver of fineness not less than 0.995 and mountings, sockets, frames
and findings containing more than 50% silver by weight;
(iii) Platinum of fineness not less than 0.900 and mountings, sockets,
frames and findings containing more than 50% platinum by weight.
4A.11

Such authorisations shall carry an export obligation to be fulfilled as per


procedure specified in paragraph 4A.2.1 of HBP v1. Value addition shall be
as per paragraph 4A.2.1 of the HBPv1. Advance Authorisation holder may
obtain gold / silver / platinum from nominated agencies in lieu of direct
import.

4A.12
G
e
m
Replenishment
Authorisation

Gem Replenishment (Gem & Jewellery REP) Authorisation may be issued


as given in paragraph 4A.8, 4A.9 and 4A.10 above. In case of plain or
studded gold / silver / platinum jewellery and articles, value of such
Authorisations shall be determined with reference to realisation in excess of
prescribed minimum VA. Such Gem REP Authorisations shall be freely
transferable.

4A.13
Replenishment Rate and item of import will be as prescribed in Appendix
G e m R E P R a t e 12B of HBP v1.
and Item
4A.14
Export Promotion
Tours/ Export of
B r a n d e d
J e w e l l e r y

(a) Nominated agencies and their associates, with approval of Department


of Commerce, and others, with approval of Gem & Jewellery EPC
(GJEPC), may export gold / silver / platinum jewellery and articles thereof
for exhibitions abroad.
(b) Personal carriage of gold / silver / platinum jewellery, precious, semiprecious stones, beads and articles and export of branded jewellery is also
permitted, subject to conditions as in HBP v1.

4A.15
Personal carriage of gems and jewellery export parcels by foreign bound
Personal Carriage passengers and import parcels by an Indian importer/foreign national may
of Export / Import be permitted as in HBP v1.
Parcels
4A.16
Export by Post

In case of exports through Foreign Post Office (including via Speed Post),
the jewellery parcels shall not exceed 20 kg. by weight.

4A.16A

Private/Public Bonded Warehouses may be set up in SEZ/DTA for import

P r i v a t e / P u b l i c and re-export of cut and Polished diamonds, cut and polished coloured
B o n d e d gemstones, uncut & unset precious & semi-precious stones, subject to
W a r e h o u s e achievement of minimum VA of 5%.
Notification
0 2 ( R E - 2 0 1 3 ) / (3) In para 4A.16A of FTP inserted vide Notification No.30 dated
2009-2014
31.01.2013 in respect of Private/Public Bonded Warehouse the minimum
value addition of 5% shall be only for DTA units and not SEZ units.
Accordingly, the para may be modified as under:
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 VA of 5% by DTA units.
Date Time-18/04/2013
30 (RE - 2012) /
2009-2014
I ntro d u c t i o n o f
provision for
setting up of
Private/Public
B o n d e d
Warehouses for
G e m s
a n d
Jewellery sector
in
FTP(RE2012)(2009-

S.O (E) : In exercise of the powers conferred by Section 5 of the Foreign


Trade (Development & Regulation) Act, 1992, as amended, read with
paragraph 1.3 of the Foreign Trade Policy, 2009-2014, the Central
Government hereby amends with immediate effect Foreign Trade
Policy, 2009-2014 (RE 2012) and introduces a new para 4A.16A for
setting up of Private/Public Bonded Warehouses for Gems and
Jewellery sector.
2. A new para 4A.16A after para 4A.16 is being added in FTP as under:
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 VA of 5%.
3. Effect of this amendment : This will facilitate setting up of Private/Public
Bonded Warehouses in SEZ/DTA for Diamond , Gems and precious/semi
precious stones.
[Similar provision had existed in the Foreign Trade Policy earlier, but got
withdrawn with the import duty being reduced to zero. It is being
reintroduced now.]Date Time-31/01/2013

4A.17
Diamond &
Jewellery Dollar
Accounts

(a) Firms and companies dealing in purchase / sale of rough or cut and
polished diamonds / precious metal jewellery plain, minakari and / or
studded with / without diamond and / or other stones with a track record of
at least two years in import or export of diamonds / coloured gemstones /
diamond and coloured gemstones studded jewellery / plain gold jewellery
and having an average annual turnover of Rs. 3 crore or above during

preceding three licensing years may also carry out their business through
designated Diamond Dollar Accounts (DDA).
(b) Dollars in such accounts available from bank finance and / or export
proceeds shall be used only for:
(i) Import / purchase of rough diamonds from overseas / local sources;
(ii) Purchase of cut and polished diamonds, coloured gemstones and plain
gold jewellery from local sources;
(iii) Import / purchase of gold from overseas / nominated agencies and
repayment of dollar loans from the bank; and
(iv) Transfer to Rupee Account of exporter. Details of this DDA Scheme are
given in HBP v1.
(c) A non DDA holder is also permitted to supply cut and polished diamonds
to DDA holder, receive payment in dollars and convert same into Rupees
within 7 days. Cut and polished diamonds and coloured gemstones so
supplied by non-DDA holder will also be counted towards discharge of his
export obligation and / or entitle him to replenishment Authorisation.
4A.18
Export of cut &
polished precious
and semiprecious stones
for treatment and
re-import

Gems and Jewellery exporters shall be allowed to export cut and polished
precious and semi-precious stones for the treatment and re-import as per
customs rules and regulations. In case of re-export, the exporter shall be
entitled for duty drawback as per rules.

4A.19
Gems & Jewellery exporters shall be allowed to re-import rejected precious
Re-import of
metal jewellery as per para 4A.32 of HBP v1.
rejected jewellery
4A.2
Import of
Diamonds for
Certification /
Grading & Reexport

The authorised offices/agencies in India of Gemological Institute of America


(GIA) or any other agency approved in this regard shall be permitted to
import diamonds to their laboratories for the purpose of certification/grading
reports by them with a condition that the same should be re-exported with
the certification/grading reports issued by them without any import duty as
per the procedure laid down in HBP v1.

4A.2.1
Export of Cut &
Polished
Diamonds for
Certification/
Grading & Re-

Following are authorized laboratories for certification/ grading of diamonds


of 0.25 carat and above:
(i) Indian Diamond Institute, Surat, Gujarat;
(ii) American Gem Society Laboratories (AGS Laboratories),8917 West

import

Sahara Avenue, Las Vegas, Nevada 89117;


(iii) Central Gem Laboratory, Miyagi Building, 5-15-14 Ueno Taito-Ku,
Tokyo, Japan;
(iv) Diamond Trading Company, Maidenhead, UK;
(v) European Gemological Laboratory (EGL), USA;
(vi) Gemological Institute of America (GIA), USA;
(vii) Hoge Road Voor Diamond, Antwerp, (HRD);
(viii) International Diamond Laboratories DMCC, Dubai;
(ix) The Robert Mouawad Campus, International Gemological Institute (IGI)
USA; and
(x) World Diamond Centre of Diamonds High Council, Antwerp, Belgium.

Notification
25 (RE-2013)/
2009-14
Amendment in
Para 4A.2.1 and
4A.2.2 of FTP

Para 4A.2.1 and Para 4A.2.2 of FTP are being amended to allow reduction
in size of diamond from 0.25 carat and above to 0.10 carat and above for
certification by authorised laboratories in India and abroad (and re-import
duty free in case of export after certification). After amendment the opening
portion of the amended paras 4A.2.1 & 4A.2.2 would read as under:4A.2.1 Following are authorised laboratories for certification/grading of
diamonds of 0.10 carat and above:.........
4A.2.2 An exporter (with annual export turnover of Rs 5 crores for each of
the last three years) may export cut & polished diamonds (each of 0.10
carat or above) to any of the above agencies/laboratories with re-import
facility at zero duty within 3 months from the date of export.
Effect of this Notification: Cut & polished diamonds of 0.10 carat or
above can be exported and thereafter re-imported duty free after
certification by authorised laboratories. Earlier this was allowed for
diamonds of size 0.25 carat and above only.
Date Time-03/07/2013

11 (RE - 2012) /
2009-2014

2. Under para 4A.2.1 of the Foreign Trade Policy dealing with Export of
Cut & Polished Diamonds for Certification/ Grading & Reimportfollowing five additional authorized laboratories for certification/
grading of diamonds of 0.25 carat and above are added after Serial No. (x):

(xi) GIA Hong Kong Laboratory Ltd., Hong Kong;


(xii) Gemological Research (Thailand) Co. Ltd., Bangkok;
(xiii) GIA Education and Laboratory (Pvt) Ltd., Johannesburg;
(xiv) GIA Education and Laboratory, Goborone (Botswana);
(xv) Forevermark NV, Antwerp, BelgiumDate Time-22/08/2012
4A.2.2

An exporter (with annual export turnover of Rs 5 crores for each of the last
three years) may export cut & polished diamonds (each of 0.25 carat or
more) abroad to any of the above agencies/ laboratories with re-import
facility at zero duty within 3 months from the date of export. Such facility of
export and subsequent re-import at zero duty will be subject to guidelines
issued by CBEC, Department of Revenue.

Notification
25 (RE-2013) /
2009-14
Amendment in
Para 4A.2.1 and
4A.2.2 of FTP

Para 4A.2.1 and Para 4A.2.2 of FTP are being amended to allow reduction
in size of diamond from 0.25 carat and above to 0.10 carat and above for
certification by authorised laboratories in India and abroad (and re-import
duty free in case of export after certification). After amendment the opening
portion of the amended paras 4A.2.1 & 4A.2.2 would read as under:4A.2.1 Following are authorised laboratories for certification/grading of
diamonds of 0.10 carat and above:.........
4A.2.2 An exporter (with annual export turnover of Rs 5 crores for each of
the last three years) may export cut & polished diamonds (each of 0.10
carat or above) to any of the above agencies/laboratories with re-import
facility at zero duty within 3 months from the date of export.
Effect of this Notification: Cut & polished diamonds of 0.10 carat or
above can be exported and thereafter re-imported duty free after
certification by authorised laboratories. Earlier this was allowed for
diamonds of size 0.25 carat and above only.
Date Time-03/07/2013

4A.20
Export and
imports on
consignment
basis

Gems & Jewellery exporters shall be allowed to export and import diamond,
gemstones & jewellery on consignment basis as per HBP v1 and Customs
rules and regulations.

4A.3
Schemes for

Exporters of gold / silver / platinum jewellery and articles thereof may import
their essential inputs such as gold, silver, platinum, mountings, findings,

Gold/ Silver/
Platinum
Jewellery

rough gems, precious and semi-precious stones, synthetic stones and


unprocessed pearls etc. in accordance with the procedure specified in this
behalf.

4A.4
Nominated
Agencies

(a) Nominated agencies are MMTC Ltd, Handicraft and Handloom Export
Corporation (HHEC), State Trading Corporation (STC), the Project and
Equipment Corporation of India Ltd (PEC), STCL Ltd, MSTC Ltd, Diamond
India Limited (DIL), Gems & Jewellery Export Promotion Council (G&J
EPC), Star Trading House (only for Gems & Jewellery sector) and Premier
Trading House under Paragraph 3.10.2 of FTP and any other agency
authorised by RBI. Exporters (except EOUs and units in SEZ) may obtain
gold / silver / platinum from nominated agency(ies).
(b) Procedure for import of precious metal by these agencies (other than
those authorized by RBI 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 HBP v1 in this regard.
(c) A bank authorised by RBI is allowed export of gold scrap for refining and
import standard gold bars as per RBI guidelines.

4A.5
Items of Export

Following items, if exported, would be eligible for facilities:


(a) Gold jewellery, including partly processed jewellery and articles
including medallions and coins (excluding legal tender coins), whether plain
or studded, containing gold of 8 carats and above;
(b) 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;
(c) Platinum jewellery including partly processed jewellery and articles
including medallions and coins (excluding legal tender coins and any
engineering goods) containing more than 50% platinum by weight.

4A.6
Value Addition

Value Addition (VA) for gems and jewellery sector shall be as per
paragraph 4A.2.1 of HBP v1. It would be calculated as under:
VA = (A - B) / B x 100, where
A = FOB value of the export realised / FOR value of supply received.
B = Value of inputs ( including domestically procured ) such as gold / silver /
platinum content in export product plus admissible wastage along with
value of other items such as gemstone etc. Wherever gold has been

obtained on loan basis, value shall also include interest paid in free foreign
exchange to foreign supplier.
4A.7
Wastage Norms

Wastage or manufacturing loss for gold / silver / platinum jewellery shall be


admissible as per paragraph 4A.2 of HBP v1.

4A.8
Export against
Supply by
Foreign Buyer

(a) Where export orders are placed on nominated agencies / status holder /
exporters of three years standing having an annual average turnover of Rs.
Five Crores during preceding three licensing years, foreign buyer may
supply in advance and free of charge, gold / silver / platinum, alloys,
findings and mountings of gold / silver / platinum for manufacture and
export.
(b) Such supplies can also be in advance and may involve semi-finished
jewellery including findings / mountings / components for repairs / re-make
and export subject to minimum value addition as prescribed under para
4A.2.1 of HBP v1. In such cases of export, wastage norms as per para 4A.2
shall apply.
(c) Exports may be made by nominated agencies directly or through their
associates or by status holder / exporter. Import and Export of findings shall
be on net to net basis.

4A.9
Export Against
Supply by
Nominated
Agencies

Exporter may obtain gold / silver / platinum as an input for export products
from nominated agencies in advance or as replenishment after exports in
accordance with specified procedure.

CHAPTER-5
EXPORT PROMOTION CAPITAL GOODS SCHEME
5.1
Zero Duty EPCG
Scheme

(a) Zero duty EPCG scheme allows import of capital goods (including
CKD/SKD thereof as well as computer software systems) for preproduction, production and post-production at zero Customs duty, subject
to an export obligation equivalent to 6 times of duty saved on capital goods
imported under EPCG scheme, to be fulfilled in 6 years reckoned from
Authorization issue-date.
(b) Zero duty EPCG scheme shall not be available to exporters, who avail
in that year, the benefit of Status Holder Incentive Scheme under
Paragraph 3.16 of FTP. In case they have already availed SHIS benefit
they would be eligible for Zero Duty Scheme if they surrender or refund
SHIS, with applicable interest in case SHIS has been utilized.
(c) In case countervailing duty (CVD) is paid in cash on imports under

EPCG, incidence of CVD would not be taken for computation of net duty
saved, provided the same is not CENVATed.
(d) Capital Goods shall include spares (including refurbished/reconditioned
spares), tools, jigs, fixtures, dies and moulds.
(e) Second hand capital goods shall not be permitted to be imported under
EPCG Scheme.
(f) Import of Restricted items of imports mentioned under ITC (HS) shall
only be allowed under EPCG Scheme after approval from EFC at
Headquarters.
(g) Authorization under EPCG Scheme shall not be issued for import of any
Capital Goods (including Captive plants and Power Generator Sets of any
kind) for
i. Export of electrical energy (power)
ii.Supply of electrical enegry (power) under deemed exports
iii. Use of power (energy) in their own unit, and
iv. Supply/ export of electricity transmission services.
Notification
07 (RE - 2013) /
2009-2014

In exercise of powers conferred by Section 5 of the Foreign Trade


(Development & Regulation) Act, 1992 (No. 22 of 1992) read with
paragraph 1.2 of the Foreign Trade Policy 2009-2014, the Central
Government hereby amends, with immediate effect, Para 5.1 of the Foreign
Trade Policy (RE-2013)/2009-14.
A new sub-para (g) is being inserted after para 5.1(f) of FTP as under:
5.1(g) Authorization under EPCG Scheme shall not be issued for import of
any Capital Goods (including Captive plants and Power Generator Sets of
any kind) for
i.
Export of electrical energy (power)
ii.
Supply of electrical energy (power) under deemed exports
iii.
Use of power (energy) in their own unit, and
iv.
Supply/export of electricity transmission services.
Effect of Notification: Import of Capital Goods for production/transmission
of energy(power) will no longer be available.
(Anup K. Pujari)
Director General of Foreign Trade
E-mail: dgft@nic.in
Date Time-18/04/2013

5.10

For exporters of Green Technology Products, Specific EO shall be 75% of

EPCG for Green


Technology
Products reduced EO

EO as stipulated in Para 5.1 above. There shall be no change in average


EO as stipulated in Para 5.5, if any. The list of Green Technology Products
is given in Para 5.24 of HBP v1.

5.11
(a) Post Export EPCG Duty Credit Scrip(s) shall be available to exporters
Post Export
who intend to import capital goods on full payment of applicable duties in
EPCG Duty Credit cash and choose to opt for this scheme.
Scrip(s)
(b) Basic Customs Duty paid on Capital Goods shall be remitted in the form
of freely transferable duty credit scrip(s), similar to those issued under
Chapter 3 of FTP.
(c) Specific EO under this Scheme shall be 85% of the applicable specific
EO, if the imports of such Capital Goods had taken benefit of duty
exemption. Average EO continues to remain unchanged.
(d) Duty remission shall be in proportion to the EO fulfilled.
(e) These Duty Credit Scrip(s) can be used for payment of applicable
custom duties for imports and applicable excise duties for domestic
procurement.
(f) All provisions of the existing EPCG Scheme shall apply insofar as they
are not inconsistent with this scheme.
Notification
33 (RE - 2012) /
2009-14

S.O (E) : In exercise of the powers conferred by Section 5 of the Foreign


Trade (Development & Regulation) Act, 1992, as amended, read with
paragraph 1.3 of the Foreign Trade Policy, 2009-2014, the Central
Government hereby amends with immediate effect para 5.11 of Foreign
Trade Policy, 2009-2014 (RE 2012).
2. The existing Sub-Para (b) of Para 5.11of FTP which reads as under has
been amended:Duty paid on capital goods (excluding portion CENVATed/ Rebated) shall
be remitted in the form of freely transferable duty credit scrip(s).
The amended Sub-Para (b) of Para 5.11of FTP will now read as under:
Basic Customs duty paid on Capital Goods shall be remitted in the
form of freely transferable duty credit scrip(s), similar to those issued
under Chapter 3 of FTP.
3. Effect of this amendment :

It is clarified that duty credit scrips issued under Post Export EPCG Scheme
will be issued only in respect of basic customs duty and will have the same
features as Chapter 3 scrips.
Date Time-08/02/2013
8 (RE-2012) /2009- 5. Sub-Para (a) of Para 5.11of FTP has been amended and will now read
2014
as under:
Post Export EPCG Duty Credit Scrip (s) shall be available to exporters
who intend to import capital goods on full payment of applicable duties in
cash and choose to opt for this scheme.Date Time-26/07/2012
5.12
Reduced EO for
North East
Region

For units located in Arunachal Pradesh, Assam, Manipur, Meghalaya,


Mizoram, Nagaland, Sikkim, Tripura and Jammu & Kashmir, specific EO
shall be 25% of the EO, as stipulated in Para 5.1 or Para 5.2, as applicable.
There shall be no change in average EO as stipulated in Para 5.5, if any.

5.2 A

(a) Spares (including refurbished/reconditioned spares), moulds, dies, jigs,


fixtures, tools, and refractory for initial lining; for existing plant and
machinery (imported earlier, under EPCG or otherwise), shall be allowed to
be imported under the EPCG scheme subject to an export obligation
equivalent to 50% of the export obligation prescribed in para 5.1 above (for
import of capital goods), to be fulfilled in 6 years, reckoned from
Authorization issue date. This would however be subject to the condition
that the c.i.f. value of import of the above spares etc. will be limited to 10%
of the value of plant and machinery imported under the EPCG scheme. In
case of plant and machinery not imported under the EPCG scheme, c.i.f.
value of import of the spares etc. will be limited to 10% of the book value of
the plant and machinery.
(b) Provision of para 5.2A will not be applicable for import of spares in
respect of capital goods sourced indigenously.
(c) Spares in respect of CG imported under EPCG or imported otherwise
can be imported under para 5.1 (d) without a limit (of % of the value of CG)
but shall attract export obligation of 100% of the normal EO.

5.2 D
EPCG
Authorization for
Annual
Requirement

Status Holders, exporters having past export performance (in preceding two
years) can also avail EPCG Authorization for Annual Requirement. The
annual entitlement in terms of duty saved amount shall be upto 50% of FOB
value of Physical Export, Service Exports and / or FOR value of Deemed
Export, in preceding licensing year.

5.2B
(a) Import of capital goods under EPCG authorizations can also be availed
EPCG for Projects which are covered under Scheme for Project Imports notified by the Central

Board of Excise and Customs vide Customs Notification No. 12/2012 dated
17.03.2012.
(b) Export obligation for such EPCG Authorizations would be 6 times of
duty saved. Duty saved would be difference between the effective duty
under aforesaid Customs Notification and concessional duty under the
EPCG Scheme.
5.2C
EPCG for Retail
Sector

EPCG scheme shall also be available for import of capital goods required
by retailers having minimum area of 1000 sq. meters to create modern
infrastructure in retail sector.

5.3
Eligibility

(a) EPCG scheme covers manufacturer exporters with or without


supporting manufacturer(s)/ vendor(s), merchant exporters tied to
supporting manufacturer(s) and service providers.
(b) Export Promotion Capital Goods (EPCG) Scheme also covers a service
provider who is designated / certified as a Common Service Provider (CSP)
by the DGFT, Department of Commerce or State Industrial Infrastructural
Corporation in a Town of Export Excellence subject to provisions of Foreign
Trade Policy/Handbook of Procedures with the following conditions:(i) Exports by Users of the common service, to be counted towards
fulfillment of EO of the CSP shall (i) contain the EPCG Authorization details
of the CSP in the respective Shipping bills and (ii) concerned RA must be
informed about the details of the Users prior to such export;
(ii) Such exports will not count towards fulfillment of other specific export
obligations; and
(iii) Bank Guarantee (BG) shall be equivalent to the duty saved. BG can be
given by CSP or by any one of the users or a combination thereof, at the
option of the CSP.

5.4
AU Condition
under EPCG

Import of capital goods shall be subject to Actual User condition till export
obligation is completed.

5.5
Following conditions shall apply to the fulfillment of the EO:Export Obligation
(a) EO shall be fulfilled by export of goods manufactured / services
(EO)
rendered by the applicant.
(b) EO under the scheme shall be, over and above, the average level of
exports achieved by the applicant in the preceding three licensing years for
the same and similar products within the overall EO period including
extended period, if any; except for categories mentioned in paragraph 5.7.6

of HBP Vol. I. Such average would be the arithmetic mean of export


performance in the preceding three years for the same and similar products
provided that Premier Trading House (PTH) shall have option of fixing
average level of exports based on arithmetic mean of export performance in
the last five years instead of three years.
(c) In case of indigenous sourcing of Capital Goods, specific EO shall be
10% less than the EO stipulated in Para 5.1 above.
(d) Shipments under Advance Authorization, DFRC, DFIA, or Drawback
scheme, or incentive schemes under Chapter 3 of FTP; would also count
for fulfillment of EO under EPCG Scheme.
(e) EO can also be fulfilled by the supply of ITA-I items to DTA, provided
realization is in free foreign exchange.
(f) Exports shall be physical exports. However, deemed exports as
specified in paragraph 8.2 (a), (b), (d), (f) & (j) of FTP shall also be counted
towards fulfillment of export obligation, alongwith usual benefits available
under paragraph 8.3 of FTP.
(g) Royalty payments received by the Authorization Holder in freely
convertible currency and foreign exchange received for R&D services shall
also be counted for discharge under EPCG.
(h) Payment received in rupee terms for port handling services, in terms of
Chapter 9 of FTP shall also be counted for EO discharge.
5.5.1
Provision for
BIFR units

(a) Any firm/ company registered with BIFR or any firm/ company acquiring
a unit, which is under BIFR, may be allowed EO extension, as per
rehabilitation package prepared by operating agency and approved by
BIFR / Rehabilitation Department of State Government, upto 9 years if not
specified.
(b) Above provisions apply also to SSI units as per rehabilitation scheme of
concerned State government

Notification
70 (RE-2013)/
2009-14

S.O.(E) In exercise of the powers conferred by Section 5 of the Foreign


Trade (Development and Regulation) Act, 1992 read with Para 1.3 of the
Foreign Trade Policy, 2009-2014, the Central Government hereby makes
the following amendment in sub-para (b) of Para 5.5.1 of the Foreign Trade
Policy (FTP) 2009-14 with immediate effect:
2.
A new sub para (c) is being inserted after sub para 5.5.1(b). The
new para shall read as under:

5.5.1 (c)
Wherever the holder of any EPCG Authorization is granted
relief under Corporate Debt Restructuring (CDR), then such Authorization
holder may be allowed EO extension of 3 years (from the date of approval
of the CDR mechanism/scheme). Such extension in EO will not attract any
Composition fee and will be in addition to (and not in lieu of) the granting of
EO extension, if any, available under Para 5.11 of HBP v1.
Effect of this Notification:
Additional time of 3 years for fulfillment of EO
may be allowed to the concerned EPCG Authorization holder, if such holder
receives relief under Corporate Debt Restructuring mechanism.
(Anup K. Pujari)
Director General of Foreign Trade
E-mail: dgft@nic.in
[Issued from File No. 18/48/AM-14/P-5]
Date Time-20/02/2014
5.5.2
EPCG for Agro
units

LUT/Bond or 15% BG (as applicable) may be given for EPCG Authorization


granted to units in Agri Export Zones provided EPCG Authorization is taken
for export of primary agricultural product(s) notified in Appendix 8 or their
value added variants.

5.6
Indigenous
Sourcing of
Capital Goods
and benefits to
Domestic
Supplier

A person holding an EPCG Authorization may source capital goods from a


domestic manufacturer. Such domestic manufacturer shall be eligible for
deemed export benefit under paragraph 8.3 of FTP. Such domestic
sourcing shall also be permitted from EOUs and these supplies shall be
counted for purpose of fulfillment of positive NFE by said EOU as provided
in Para 6.9 (a) of FTP.

5.7
In case of direct imports, EO shall be reckoned with reference to actual duty
Fixation of Export saved amount. In case of domestic sourcing, EO shall be reckoned with
Obligation (EO)
reference to notional Customs duties saved on FOR value.
5.8
Technological
Upgradation of
existing EPCG
machinery

EPCG Authorization holders can opt for Technological Upgradation of


existing capital good imported under EPCG Authorization(s). Conditions
governing are as under:
(a) Minimum time period for applying for Technological Upgradation is 4
years from earlier EPCG Authorization issue-date.
(b) Minimum exports made must be 50% of total export obligation imposed
on earlier EPCG Authorization(s).

(c) EO would be re-fixed such that


(i) total EO shall be sum total of 6 times of duty saved of earlier EPCG and
the new one, and
(ii) EOP is 6 years from EPCG authorization issue-date under this Para.
(d) Facility for technological up-gradation shall be available only once and
the minimum imports to be made shall be at least 10% of the existing
investment in plant and machinery by applicant.
(e) Capital Goods to be imported must be new and technologically superior
to earlier CG (to be certified by Chartered Engineer).
5.9
With a view to accelerate exports, in cases where Authorization holder has
Incentive for early fulfilled 75% or more of specific export obligation and 100% of Average
EO fulfilment
Export Obligation till date, if any, in half or less than half the original export
obligation period specified, remaining export obligation shall be condoned
and the Authorization redeemed by RA concerned. However no benefits
under Para 5.12 of HBP v1 shall be available in such cases.

CHAPTER-6
EXPORT ORIENTED UNITS (EOUs), ELECTRONICS
HARDWARE TECHNOLOGY PARKS (EHTPs), SOFTWARE
TECHNOLOGY PARKS (STPs) AND BIO- TECHNOLOGY
PARKS (BTPs)
6.1
Eligibility

Units undertaking to export their entire production of goods and services


(except permissible sales in DTA), may be set up under the Export Oriented
Unit (EOU) Scheme, Electronics Hardware Technology Park (EHTP)
Scheme, Software Technology Park (STP) Scheme or Bio-Technology Park
(BTP) Scheme for manufacture of goods, including repair, re-making,
reconditioning, re-engineering and rendering of services. Trading units are
not covered under these schemes.

6.10
Export through
others

An EOU / EHTP / STP / BTP unit may export goods manufactured /


software developed by it through another exporter or any other EOU /
EHTP / STP / SEZ unit subject to conditions mentioned in para 6.18 of HBP
v1.

6.11
Entitlement for

(a) Supplies from DTA to EOU / EHTP / STP / BTP units will be regarded
as deemed exports and DTA supplier shall be eligible for relevant

supplies from the entitlements under chapter 8 of FTP, besides discharge of export
DTA
obligation, if any, on the supplier. Notwithstanding the above, EOU / EHTP /
STP / BTP units shall, on production of a suitable disclaimer from DTA
supplier, be eligible for obtaining entitlements specified in chapter 8 of FTP.
For claiming deemed export duty drawback, they shall get brand rates fixed
by DC wherever All Industry Rates of Drawback are not available.
(b) Suppliers of precious and semi-precious stones, synthetic stones and
processed pearls from DTA to EOU shall be eligible for grant of
Replenishment Authorisations at rates and for items mentioned in HBP v1.
(c) In addition, EOU / EHTP / STP / BTP units shall be entitled to following:(i) Reimbursement of Central Sales Tax (CST) on goods manufactured in
India. Simple interest @ 6% per annum will be payable on delay in refund
of CST, if the case is not settled within 30 days of receipt of complete
application (as in paragraph 9.10.1 of HBP v1).
(ii) Exemption from payment of Central Excise Duty on goods procured
from DTA on goods manufactured in India.
(iii) Reimbursement of duty paid on fuel procured from domestic oil
companies / Depots of domestic oil Public Sector Undertakings as per
drawback rate notified by DGFT from time to time. Reimbursement of
additional duty of excise levied on fuel under the Finance Acts would also
be admissible.
(iv) CENVAT Credit on service tax paid.
6.12
Other
Entitlements

Other entitlements of EOU / EHTP / STP / BTP units are as under:


(a) Exemption from Income Tax as per Section 10A and 10B of Income Tax
Act.
(b) Exemption from industrial licensing for manufacture of items reserved
for SSI sector.
(c) Export proceeds will be realized within 12 months.
(d) Units will be allowed to retain 100% of its export earning in the EEFC
account.
(e) Unit will not be required to furnish bank guarantee at the time of import
or going for job work in DTA, where unit has
(i) a turnover of Rs. 5 crores or above;

(ii) unit is in existence for at least three years; and


(iii) The unit:
a) has achieved positive NFE / export obligation wherever applicable;
b) has not been issued a show cause notice or a confirmed demand, during
the preceding 3 years, on grounds other than procedural violations, under
the penal provision of the Customs Act, the Central Excise Act, the Foreign
Trade (Development & Regulation) Act, the Foreign Exchange
Management Act, the Finance Act, 1994 covering Service Tax or any allied
Acts or the rules made thereunder, on account of fraud / collusion / willful
mis-statement / suppression of facts or contravention of any of the
provisions thereof;
(f) 100% FDI investment permitted through automatic route similar to SEZ
units.
(g) Units shall pay duty on the goods produced or manufactured and
cleared into DTA on monthly basis in the manner prescribed in the Central
Excise Rules.
6.13
(a) Transfer of manufactured goods from one EOU / EHTP / STP / BTP unit
Inter Unit Transfer to another EOU / EHTP / STP / BTP unit is allowed with prior intimation to
concerned DC and Customs authorities, following procedure of in-bond
movement of goods. Transfer of manufactured goods shall also be allowed
from EOU / EHTP / STP / BTP unit to a SEZ developer or unit following
procedure prescribed in SEZ Rules, 2006.
(b) Capital goods may be transferred or given on loan to other EOU / EHTP
/ STP / BTP / SEZ units, with prior intimation to concerned DC and
Customs authorities.
(c) Goods supplied by one unit of EOU / EHTP / STP / BTP to another unit
shall be treated as imported goods for second unit for payment of duty, on
DTA sale by second unit.
6.14
Sub-Contracting

(a)
(i) EOU / EHTP / STP / BTP units, including gems and jewellery units, may
on the basis of annual permission from Customs authorities, subcontract
production processes to DTA through job work which may also involve
change of form or nature of goods, through job work by units in DTA.
(ii) These units may subcontract upto 50% of overall production of previous
year in value terms in DTA with permission of Customs authorities.

(b)
(i) EOU may, with annual permission from Customs authorities, undertake
job work for export, on behalf of DTA exporter, provided that goods are
exported directly from EOU and export document shall jointly be in name of
DTA / EOU. For such exports, DTA units will be entitled for refund of duty
paid on inputs by way of brand rate of duty drawback.
(ii)Duty free import of goods for execution of export order placed on EOU by
foreign supplier on jobwork basis, would be allowed subject to condition
that no DTA clearance shall be allowed.
(iii) Subcontracting of both production and production processes may also
be undertaken without any limit through other EOU / EHTP / STP / BTP /
SEZ units, on the basis of records maintained in unit.
(iv)EOU / EHTP / STP / BTP units may subcontract part of production
process abroad and send intermediate products abroad as mentioned in
LoP. No permission would be required when goods are sought to be
exported from subcontractor premises abroad. When goods are sought to
be brought back, prior intimation to concerned DC and Customs authorities
shall be given.
(c) Scrap / waste / remnants generated through job work may either be
cleared from job workers premises on payment of applicable duty on
transaction value or destroyed in presence of Customs / Central Excise
authorities or returned to unit. Destruction shall not apply to gold, silver,
platinum, diamond, precious and semi precious stones.
(d) Sub-contracting / exchange by gems and jewellery EOUs through other
EOUs or SEZ units or units in DTA, shall be as per procedure indicated in
HBP v1.
6.15
(a) In case an EOU / EHTP / STP / BTP unit is unable to utilize goods and
Sale of Unutilized services, imported or procured from DTA, it may be
Material
(i) transferred to another EOU / EHTP / STP / BTP / SEZ unit; or
(ii) disposed off in DTA with approval of Customs authorities on payment of
applicable duties and submission of import authorization; or
(iii) exported. Such transfer from EOU / EHTP / STP / BTP unit to another
such unit would be treated as import for receiving unit.
(b) Capital goods and spares that have become obsolete / surplus, may
either be exported, transferred to another EOU / EHTP / STP / BTP / SEZ
unit or disposed off in DTA on payment of applicable duties. Benefit of

depreciation, as applicable, will be available in case of disposal in DTA only


when the unit has achieved positive NFE taking into consideration the
depreciation allowed. No duty shall be payable in case capital goods, raw
material, consumables, spares, goods manufactured, processed or
packaged, and scrap / waste / remnants / rejects are destroyed within unit
after intimation to Customs authorities or destroyed outside unit with
permission of Customs authorities. Destruction as stated above shall not
apply to gold, silver, platinum, diamond, precious and semi precious stones.
(c) In case of textile sector, disposal of left over material / fabrics upto 2% of
cif value or quantity of import, whichever is lower, on payment of duty on
transaction value, may be allowed, subject to certification of Central Excise
/ Customs officers that these are leftover items.
(d) Disposal of used packing material will be allowed on payment of duty on
transaction value.
6.16
Reconditioning /
Repair and Reengineering

EOU / EHTP / STP / BTP units may be set up with approval of BoA to carry
out reconditioning, repair, remaking, testing, calibration, quality
improvement, up-gradation of technology and re-engineering activities for
export in foreign currency. Provisions of paragraphs 6.8, 6.9, 6.10, 6.13,
6.14 of FTP and para 6.28 of HBP v1 shall not, however, apply to such
activities.

6.17
Replacement /
Repair of
imported /
Indigenous
Goods

(a) General provisions of FTP relating to export / import of replacement /


repair of goods would also apply equally to EOU / EHTP / STP / BTP units.
Cases not covered by these provisions shall be considered on merits by
DC.
(b) Goods sold in DTA and not accepted for any reasons, may be brought
back for repair / replacement, under intimation to concerned jurisdictional
Customs / Central Excise authorities.
(c) Goods or parts thereof, on being imported / indigenously procured and
found defective or otherwise unfit for use or which have been damaged or
become defective subsequently, may be returned and replacement
obtained or destroyed. In the event of replacement, goods may be brought
back from foreign suppliers or their authorized agents in India or indigenous
suppliers. The unit can take free of cost replacement (duty paid) from the
authorized agents in India of foreign suppliers, provided the defective part is
re-exported or destroyed. However destruction shall not apply to precious
and semi precious stones and precious metals.

6.18
Exit from EOU
Scheme

(a) With approval of DC, an EOU may opt out of scheme. Such exit shall be
subject to payment of Excise and Customs duties and industrial policy in
force.

(b) If unit has not achieved obligations, it shall also be liable to penalty at
the time of exit.
(c) In the event of a gems and jewellery unit ceasing its operation, gold and
other precious metals, alloys, gems and other materials available for
manufacture of jewellery, shall be handed over to an agency nominated by
DoC, at price to be determined by that agency.
(d) An EOU / EHTP / STP / BTP unit may also be permitted by DC to exit
from the scheme at any time on payment of duty on capital goods under the
prevailing EPCG Scheme for DTA Units. This will be subject to fulfillment of
positive NFE criteria under EOU scheme, eligibility criteria under EPCG
scheme and standard conditions indicated in HBP v1.
(e) Unit proposing to exit out of EOU scheme shall intimate DC and
Customs and Central Excise authorities in writing. Unit shall assess duty
liability arising out of debonding and submit details of such assessment to
Customs and Central Excise authorities. Customs and Central Excise
authorities shall confirm duty liabilities on priority basis, subject to the
condition that the unit has achieved positive NFE, taking into consideration
the depreciation allowed. After payment of duty and clearance of all dues,
unit shall obtain No Dues Certificate from Customs and Central Excise
authorities. On the basis of No Dues Certificate so issued by the Customs
and Central Excise authorities, unit shall apply to DC for final debonding. In
case there is no proceeding pending under FT(D&R) Act, DC shall issue
final debonding order within a period of 7 working days. Between No Dues
Certificate issued by Customs and Central Excise authorities and final
debonding order by DC, unit shall not be entitled to claim any exemption for
procurement of capital goods or inputs. However, unit can claim Advance
Authorisation / DEPB / Duty Drawback. Since the duty calculations and
dues are disputed and take a long time, a BG / Bond / Installment
processes backed by BG shall be provided for expediting the exit process.
(f) In cases where a unit is initially established as DTA unit with machines
procured from abroad after payment of applicable import duty, or from
domestic market after payment of excise duty, and unit is subsequently
converted to EOU, in such cases removal of such capital goods to DTA
after debonding would be without payment of duty. Similarly, in cases
where a DTA unit imported capital goods under EPCG Scheme and after
completely fulfilling export obligation gets converted into EOU, unit would
not be charged customs duty on capital goods at the time of removal of
such capital goods in DTA when debonding.
(g) An EOU / EHTP / STP / BTP unit may also be permitted by DC to exit
under Advance Authorization as a one time option. This will be subject to
fulfillment of positive NFE criteria

6.19
Conversion

(a) Existing DTA units may also apply for conversion into an EOU / EHTP /
STP / BTP unit, and Income Tax benefits under Section 10A and 10B will
be available for plant, machinery and equipment already installed.
(b) Existing EHTP / STP units may also apply for conversion / merger to
EOU unit and vice-versa. In such cases, units will remain in bond and avail
exemptions in duties and taxes as applicable.

6.2
(a)
Export and Import (i) An EOU / EHTP / STP / BTP unit may export all kinds of goods and
of Goods
services except items that are prohibited in ITC (HS). Export of Special
Chemicals, Organisms, Materials, Equipment and Technologies (SCOMET)
shall be subject to fulfillment of the conditions indicated in ITC (HS).
(ii) Procurement and supply of export promotion material like brochure /
literature, pamphlets, hoardings, catalogues, posters etc. upto a maximum
value limit of 1.5% of FOB value of previous years exports shall also be
allowed.
(b) An EOU / EHTP / STP / BTP unit may import and /or procure, from DTA
or bonded warehouses in DTA / international exhibition held in India,
without payment of duty, all types of goods, including capital goods,
required for its activities, provided they are not prohibited items of import in
the ITC (HS). Any permission required for import under any other law shall
be applicable. Units shall also be permitted to import goods including
capital goods required for approved activity, free of cost or on loan / lease
from clients. Import of capital goods will be on a self certification basis.
Goods imported by a unit shall be with actual user condition and shall be
utilized for export production.
(c) State Trading regime shall not apply to EOU manufacturing units.
However, in respect of Chrome Ore / Chrome concentrate, State Trading
Regime as stipulated in export policy of these items, will be applicable to
EOUs.
(d) EOU / EHTP / STP / BTP units may import / procure from DTA, without
payment of duty, certain specified goods for creating a central facility.
Software EOU / DTA units may use such facility for export of software.
(e) An EOU engaged in agriculture, animal husbandry, aquaculture,
floriculture, horticulture, pisciculture, viticulture, poultry or sericulture may
be permitted to remove specified goods in connection with its activities for
use outside bonded area.
(f) Gems and jewellery EOUs may source gold / silver / platinum through
nominated agencies on loan / outright purchase basis. Units obtaining gold
/ silver / platinum from nominated agencies, either on loan basis or outright

purchase basis shall export gold / silver / platinum within 90 days from date
of release.
(g) EOU / EHTP / STP / BTP units, other than service units, may export to
Russian Federation in Indian Rupees against repayment of State Credit /
Escrow Rupee Account of buyer subject to RBI clearance, if any.
(h) Procurement and export of spares / components, upto 5% of FOB value
of exports, may be allowed to same consignee / buyer of the export article,
subject to the condition that it shall not count for NFE and direct tax benefits
(i) BoA may allow, on a case to case basis, requests of EOU / EHTP / STP
/ BTP units in sectors other than Gems & Jewellery, for consolidation of
goods related to manufactured articles and export thereof along with
manufactured article. Such goods may be allowed to be imported /
procured from DTA by EOU without payment of duty, to the extent of 5%
FOB value of such manufactured articles exported by the unit in preceding
financial year. Details of procured / imported goods and articles
manufactured by the EOU will be listed separately in the export documents.
In such cases, value of procured / imported goods will not be taken into
account for calculation of NFE, DTA sale entitlement & profits accruing out
of such procured / imported goods will not be eligible for income tax
benefits. Such procured / imported goods shall not be allowed to be sold in
DTA. BoA may also specify any other conditions.
Notification
51 (RE-2013) /
2009-14
Amendment of
paragraph 6.2 (a)
(i) of FTP

The amended paragraph will read as under (new words/ sentences being
added at the end of the para are in bold letters for easy reference):
Para 6.2(a)(i)
An EOU/EHTP/STP/BTP unit may export all kinds of goods and services
except items that are prohibited in ITC (HS). Export of Special Chemicals,
Organisms, Materials, Equipment and Technologies (SCOMET) shall be
subject to fulfillment of the conditions indicated in ITC (HS). In respect of
an EOU, permission to export a prohibited item may be considered, by
BOA, provided such raw materials are imported and there is no
procurement of such raw material from DTA.
Date Time-14/11/2013

6.20
Performance of EOU / EHTP / STP / BTP units shall be monitored by Units
Monitoring of NFE Approval Committee as per guidelines in HBP v1.
6.21
Export through
Exhibitions /
Export Promotion

EOU / EHTP / STP / BTP are permitted to: (i) Export goods for holding /
participating in exhibitions abroad with permission of DC. (ii) Personal
carriage of gold / silver / platinum jewellery, precious, semi-precious stones,
beads and articles. (iii) Export goods for display / sale in permitted shops

T o u r s
/ set up abroad. (iv) Display / sell in permitted shops set up abroad, or in
s h o w r o o m s showrooms of their distributors / agents. (v) Set up showrooms / retail
a b r o a d / D u t y outlets at International Airports.
Free Shops
6.22
Personal Carriage
of Import / Export
Parcels including
through Foreign
b o u n d
Passengers

Import / export through personal carriage of gems and jewellery items may
be undertaken as per Customs procedure. However, export proceeds shall
be realized through normal banking channel. Import / export through
personal carriage by units, other than gems and jewellery units, shall be
allowed provided goods are not in commercial quantity. An authorized
person of Gems & Jewellery EOU may also import gold in primary form,
upto 10 Kgs in a financial year through personal carriage, as per guidelines
prescribed by RBI and DoR.

6.23
Goods including free samples, may be exported / imported by airfreight or
Export / Import by through foreign post office or through courier, as per Customs procedure.
Post/Courier
6.24
Details of administration of EOUs and powers of DC are given in HBP v1.
Administration of
EOUs / Powers of
DC
6.25
Subject to a unit being declared sick by appropriate authority, proposals for
Revival of Sick revival of the unit or its take over may be considered by BoA.
Units
6.26
In case of units under EHTP / STP schemes, necessary approval /
Approval of EHTP permission under relevant paragraphs of this Chapter shall be granted by
/ STP
officer designated by Ministry of Communication and Information
Technology, Department of Information Technology, instead of DC, and by
Inter-Ministerial Standing Committee (IMSC) instead of BoA.
6.27
Approval of BTP

B i o -T e ch n o l o g y Par ks ( BTP) would be notified by DG F T on


recommendations of Department of Biotechnology. In case of units in BTP,
necessary approval / permission under relevant provisions of this chapter
will be granted by designated officer of Department of Biotechnology.

6.3
Second hand capital goods, without any age limit, may also be imported
S e c o n d H a n d duty free.
Capital Goods
6.4
(a) An EOU / EHTP / STP / BTP unit may, on the basis of a firm contract
Leasing of Capital between parties, source capital goods from a domestic / foreign leasing
Goods
company without payment of customs / excise duty. In such a case, EOU /

EHTP / STP / BTP unit and domestic / foreign leasing company shall jointly
file documents to enable import / procurement of capital goods without
payment of duty.
(b) An EOU / EHTP / BTP / STP unit may sell capital goods and lease back
the same from a Non Banking Financial Company (NBFC), subject to the
following conditions:
(i) The unit should obtain permission from the jurisdictional Deputy /
Assistant Commissioner of Customs or Central Excise, for entering into
transaction of Sale and Lease Back of Assets, and submit full details of the
goods to be sold and leased back and the details of NBFC;
(ii) The goods sold and leased back shall not be removed from the units
premises;
(iii) The unit should be NFE positive at the time when it enters into sale and
lease back transaction with NBFC;
(iv) A joint undertaking by the unit and NBFC should be given to pay duty
on goods in case of violation or contravention of any provision of the
notification under which these goods were imported or procured, read with
Customs Act, 1962 or Central Excise Act, 1944, and that the lien on the
goods shall remain with the Customs / Central Excise Department, which
will have first charge over the said goods for recovery of sum due from the
unit to Government under provision of Section 142(b) of the Customs Act,
1962 read with the Customs (Attachment of Property of Defaulters for
Recovery of Govt. Dues) Rules, 1995.
6.5
Net Foreign
E x c h a n g e
E a r n i n g s

EOU / EHTP / STP / BTP unit shall be a positive net foreign exchange
earner except for sector specific provision of Appendix 14-I-C of HBP v 1,
where a higher value addition shall be required. NFE Earnings shall be
calculated cumulatively in blocks of five years, starting from
commencement of production. Whenever a unit is unable to export due to
prohibition / restriction imposed on export of any product mentioned in LoP,
the five year block period for calculation of NFE earnings may be suitably
extended by BoA. BoA may also consider extension of block period by
another one year, for calculation of NFE, on case to case basis, for those
units which complete 5 years block period in between 30.09.2008 and
30.09.2009, keeping in view the decline in exports in that particular unit,
due to economic slow down only.

6.6.1
(a) On approval, a Letter of Permission (LoP) / Letter of Intent (LoI) shall be
L e t t e r
o f issued by DC / designated officer to EOU / EHTP / STP / BTP unit. LoP /
P e r m i s s i o n / LoI shall have an initial validity of 3 years, by which time unit should have

Letter of Intent commenced production. Its validity may be extended further up to 3 years
and
L e g a l by competent authority. However, proposals for extension beyond six years
U n d e r t a k i n g shall be considered in exceptional circumstances, on a case-to-case basis
by BoA. Once unit commences production, LoP / LoI issued shall be valid
for a period of 5 years for its activities. This period may be extended further
by DC for a period of 5 years at a time.
(b) LoP / LoI issued to EOU / EHTP / STP / BTP units by concerned
authority, subject to compliance of provision in para 6.2 above, would be
construed as an Authorisation for all purposes.
(c) Unit shall execute an LUT with DC concerned. Failure to ensure positive
NFE or to abide by any of the terms and conditions of LoP / LoI / IL / LUT
shall render the unit liable to penal action under provisions of the FT (D&R)
Act and Rules and Orders made thereunder, without prejudice to action
under any other law / rules and cancellation or revocation of LoP / LoI / IL.
6.6.2
Only projects having a minimum investment of Rs. 1 Crore in plant &
I n v e s t m e n t machinery shall be considered for establishment as EOUs. However, this
Criteria
shall not apply to existing units and units in EHTP / STP / BTP, Handicrafts
/ Agriculture / Floriculture / Aquaculture / Animal Husbandry / Information
Technology, Services, Brass Hardware and Handmade jewellery sectors.
BoA may also allow establishment of EOUs with a lower investment criteria.
6.7
(a) Applications for setting up of units under EOU scheme, other than
A p p l i c a t i o n & proposals for setting up of units in services sector (except R&D, software
Approvals
and IT enabled services, or any other service activity as may be delegated
by BoA), shall be approved or rejected by the Units Approval Committee
within 15 days as per criteria indicated in HBP v1.
(b) In other cases, approval may be granted by BoA set up for this purpose
as indicated in HBP v1.
(c) Proposals for setting up EOU requiring industrial licence may be granted
approval by DC after clearance of proposal by BoA and DIPP within 45
days.
(d) Applications for conversion into an EOU / EHTP / STP / BTP unit from
existing DTA units, having an investment of Rs. 50 crores and above in
plant and machinery or exporting Rs. 50 crores and above annually, shall
be placed before BoA for a decision.
6.8
Entire production of EOU / EHTP / STP / BTP units shall be exported
D T A S a l e o f subject to following:
F i n i s h e d
(a) Units, other than gems and jewellery units, may sell goods upto 50% of

Products
/
Rejects / Waste /
Scrap / Remnants
and By-products

FOB value of exports, subject to fulfilment of positive NFE, on payment of


concessional duties. Within entitlement of DTA sale, unit may sell in DTA,
its products similar to goods which are exported or expected to be exported
from units. However, units which are manufacturing and exporting more
than one product can sell any of these products into DTA, upto 90% of FOB
value of export of the specific products, subject to the condition that total
DTA sale does not exceed the overall entitlement of 50% of FOB value of
exports for the unit, as stipulated above. No DTA sale at concessional duty
shall be permissible in respect of motor cars, alcoholic liquors, books, tea
(except instant tea), pepper & pepper products, marble and such other
items as may be notified from time to time. Such DTA sale shall also not be
permissible to units engaged in activities of packaging / labeling /
segregation / refrigeration / compacting / micronisation / pulverization /
granulation / conversion of monohydrate form of chemical to anhydrous
form or vice-versa. Sales made to a unit in SEZ shall also be taken into
account for purpose of arriving at FOB value of export by EOU provided
payment for such sales are made from Foreign Exchange Account of SEZ
unit. Sale to DTA would also be subject to mandatory requirement of
registration of pharmaceutical products (including bulk drugs). An amount
equal to Anti Dumping duty under section 9A of the Customs Tariff Act,
1975 leviable at the time of import, shall be payable on the goods used for
the purpose of manufacture or processing of the goods cleared into DTA
from the unit.
(b) For services, including software units, sale in DTA in any mode,
including on line data communication, shall also be permissible up to 50%
of FOB value of exports and /or 50% of foreign exchange earned, where
payment of such services is received in foreign exchange.
(c) Gems and jewellery units may sell upto 10% of FOB value of exports of
the preceding year in DTA, subject to fulfillment of positive NFE. In respect
of sale of plain jewellery, recipient shall pay concessional rate of duty as
applicable to sale from nominated agencies. In respect of studded
jewellery, duty shall be payable as applicable.
(d) Unless specifically prohibited in LoP, rejects within an overall limit of
50% may be sold in DTA on payment of duties as applicable to sale under
sub-para 6.8(a) on prior intimation to Customs authorities. Such sales shall
be counted against DTA sale entitlement. Sale of rejects upto 5% of FOB
value of exports shall not be subject to achievement of NFE.
(e) Scrap / waste / remnants arising out of production process or in
connection therewith may be sold in DTA, as per SION notified under Duty
Exemption Scheme, on payment of concessional duties as applicable,
within overall ceiling of 50% of FOB value of exports. Such sales of scrap /
waste / remnants shall not be subject to achievement of positive NFE. In
respect of items not covered by norms, DC may fix ad-hoc norms for a

period of six months and within this period, norms should be fixed by Norms
Committee. Ad-hoc norms will continue till such time norms are fixed by
Norms Committee. Sale of waste / scrap / remnants by units not entitled to
DTA sale, or sales beyond DTA sale entitlement, shall be on payment of full
duties. Scrap / waste / remnants may also be exported.
(f) There shall be no duties / taxes on scrap / waste / remnants, in case
same are destroyed with permission of Customs authorities.
(g) By-products included in LoP may also be sold in DTA subject to
achievement of positive NFE, on payment of applicable duties, within the
overall entitlement of sub-para 6.8(a). Sale of by-products by units not
entitled to DTA sales, or beyond entitlements of sub-para 6.8 (a), shall also
be permissible on payment of full duties.
(h) EOU / EHTP / STP / BTP units may sell finished products, except
pepper and pepper products and marble, which are freely importable under
FTP in DTA, under intimation to DC, against payment of full duties,
provided they have achieved positive NFE. An amount equal to Anti
Dumping duty under section 9A of the Customs Tariff Act, 1975 leviable at
the time of import, shall be payable on the goods used for the purpose of
manufacture or processing of the goods cleared into DTA from the unit.
(i) In case of units manufacturing electronics hardware and software, NFE
and DTA sale entitlement shall be reckoned separately for hardware and
software.
(j) In case of DTA sale of goods manufactured by EOU / EHTP / STP / BTP,
where basic duty and CVD is nil, such goods may be considered as nonexcisable for payment of duty.
(k) In case of new EOUs, advance DTA sale will be allowed not exceeding
50% of its estimated exports for first year, except pharmaceutical units
where this will be based on its estimated exports for first two years.
(l) Units in Textile and Granite sectors shall have an option to sell goods
into DTA in terms of sub- paras 6.8 (a), (d), (e), (g) and (k) above, on
payment of an amount equal to aggregate of duties of excise leviable under
section 3 of the Central Excise Act, 1944 or under any other law for the time
being in force, on like goods produced or manufactured in India other than
in an EOU, subject to the condition that they have not used duty paid
imported inputs in excess of 3% of the FOB value of exports of the
preceding year and they have achieved positive NFE. Once this option is
exercised, the unit will not be allowed to import any duty free inputs for any
purpose.
6.9

Following supplies effected from EOU/EHTP/STP/BTP units will be counted

Other Supplies

for fulfillment of positive NFE. Such supplies shall not include marble,
except if such supply of marble is an inter unit supply as provided at
paragraph (c) below:
(a) Supplies effected in DTA to holders of Advance Authorisation / Advance
Authorisation for annual requirement / DFIA under duty exemption /
remission scheme / EPCG scheme. However, printing sector EOUs (or any
other sector that may be notified in HBP v 1), can not supply goods, where
basic customs duty and CVD is nil or exempted otherwise, to holders of
Advance Authorisation / Advance Authorization for annual requirement.
(b) Supplies effected in DTA against foreign exchange remittance received
from overseas.
(c) Supplies to other EOU / EHTP / STP / BTP / SEZ units, provided that
such goods are permissible for procurement in terms of para 6.2 of FTP.
(d) Supplies made to bonded warehouses set up under FTP and / or under
section 65 of Customs Act and free trade and warehousing zones, where
payment is received in foreign exchange.
(e) Supplies of goods and services to such organizations which are entitled
for duty free import of such items in terms of general exemption notification
issued by MoF, as may be provided in HBP v1.
(f) Supplies of Information Technology Agreement (ITA -1) items and
notified zero duty telecom / electronics items.
(g) Supplies of items like tags, labels, printed bags, stickers, belts, buttons
or hangers to DTA unit for export.
(h) Supply of LPG produced in an EOU refinery to Public Sector domestic
oil companies for being supplied to household domestic consumers at
subsidized prices under the Public Distribution System (PDS) Kerosene
and Domestic LPG Subsidy Scheme, 2002, as notified by the Ministry of
Petroleum and Natural Gas vide notification No. E-20029/18/2001-PP dated
28.01.2003 (hereinafter referred to as PDS Scheme) subject to the
following conditions:(i) Only supply of such quantity of LPG would be eligible for which Ministry
of Petroleum and Natural Gas declines permission for export and requires
the LPG to be cleared in DTA; and
(ii) The Ministry of Finance by a notification has permitted duty free imports
of LPG for supply under the aforesaid PDS Scheme.

CHAPTER-8
DEEMED EXPORTS
8.1
Deemed Exports

Deemed Exports refer to those transactions in which goods supplied do


not leave country, and payment for such supplies is received either in
Indian rupees or in free foreign exchange. Supply of goods as mentioned in
Paragraph 8.2 below shall be regarded as Deemed Exports provided
goods are manufactured in India.

8.2
Following categories of supply of goods by main / sub-contractors shall be
C a t e g o r i e s o f regarded as Deemed Exports:
Supply
(a) Supply of goods against Advance Authorisation / Advance Authorisation
for annual requirement / DFIA;
(b) Supply of goods to EOU / STP / EHTP / BTP;
(c) Supply of capital goods to EPCG Authorisation holders;
(d)
(i) Supply of goods to projects financed by multilateral or bilateral Agencies
/ Funds as notified by Department of Economic Affairs (DEA), MoF under
International Competitive Bidding (ICB) in accordance with procedures of
those Agencies / Funds, where legal agreements provide for tender
evaluation without including customs duty;
(ii) Supply and installation of goods and equipment (single responsibility of
turnkey contracts) to projects financed by multilateral or bilateral Agencies /
Funds as notified by DEA, MoF under ICB, in accordance with procedures
of those Agencies / Funds, which bids may have been invited and
evaluated on the basis of Delivered Duty Paid (DDP) prices for goods
manufactured abroad.
(iii) A list of such Agencies/Funds, as notified by DEA, MoF, is given in
Appendix 13 of HBP, Vol. I ;
(e) Deleted;
(f)
(i) Supply of goods to any project or purpose in respect of which the MoF,
by notification No. 12/2012 Customs dated 17.3.2012 (earlier Notification
No.21/2002-Custom dated 1.3.2002), as amended from time to time,
permits import of such goods at zero customs duty subject to conditions

specified in this Notification.


(ii) Benefits of deemed exports shall be available only if the supply is made
under procedure of ICB. However, in regard to mega power projects, the
requirement of ICB would not be mandatory, if the requisite quantum of
power has been tied up through tariff based competitive bidding or if the
project has been awarded through tariff based competitive bidding. Supply
of goods required for setting up of any mega power project as specified in
S.No. 507 of DoR Notification No. 12/2012- Customs dated 17.03.2012, as
amended, shall be eligible for deemed export benefits as mentioned in
paragraph 8.3(a), (b) and (c) of FTP, whichever is applicable, if such mega
power project complies with the threshold generation capacity specified in
Customs Notification.
(g) Deleted;
(h) Supply of marine freight containers by 100% EOU (Domestic freight
containers-manufacturers) provided said containers are exported out of
India within 6 months or such further period as permitted by customs;
(i) Supply to projects funded by UN Agencies; and
(j) Supply of goods to nuclear power projects through competitive bidding
as opposed to ICB. Supply of only those goods required for setting up any
Nuclear Power Project as specified in list 33, S. No. 511 of Notification No.
12/2012-Customs dated 17.3.2012, as amended from time to time, having a
capacity of 440MW or more, as certified by an officer not below rank of
Joint Secretary to Government of India, in Department of Atomic Energy,
shall be entitled for deemed export benefits, in cases where procedure of
competitive bidding (and not ICB ) has been followed
Circular
1 (RE-2013)/ 200914
Clarification on
admissibility of
deemed export
benefits under
Para 8.2F of FTP

A reference has been received from trade seeking certain clarifications on


admissibility of deemed export benefits under para 8.2(f) of FTP. The
issues have been considered for issuance of appropriate clarifications
under para 2.3 of FTP.
2.
Chronological sequence is described as under:
(i)
21st March 2012: Notification No. 107 (RE-2010)/ 2009-14
This notification inserted para 8.7 in the FTP. This para provided that
notwithstanding any thing contained either in FTP or HBPv1, supply to NonMega Power Project shall not be entitled to any deemed export benefit.
At the bottom of this Notification, under heading Effect of this Notification it
was stated that when the Annual Supplement to FTP is brought out, the
consequential changes of this decision will be reflected in various provision
of Chapter 8 of FTP and also HBpv1.

(ii)
5th June 2012: Release of Annual Supplement to FTP
In consequence to position given in para 2(i) above, several changes were
carried out in Chapter 8 of FTP in this Annual Supplement. Para 8.2(g) of
FTP (which was related to deemed export benefits for supply of goods to
power Projects and Refineries not covered in para 8.2(f) of FTP) was
deleted. Non-Mega Power Project were covered under para 8.2(g) of FTP
as Non-Mega Power Projects were not entitled for zero duty import and
accordingly, in view of Notification given in para 2(i) above, this para was
deleted. Similarly, provisions relating to deemed export benefits for NonMega Power Projects were also deleted from para 8.4.4(iv) of FTP.
3.
Redrafting of para 8.2(f) in the Annual Supplement
In the Annual Supplement released on 05.06.2012, para 8.2(f) was
redrafted. This para was split in two parts, First para, 8.2(f)(i), allows
deemed export benefits to supply of goods to any project or purpose which
are entitled to import goods at zero customs duties in terms of the
Notification No. 12/2012-Customs dated 17.03.2012. Second paragraph,
8.2(f)(ii), elaborates that deemed export benefits on such supply shall be
available only if the supply is made under procedure of ICB. However, in
regards to mega power project, the procedure of ICB is not required if the
project has been awarded through based competitive bidding or requisite
quantum of power has been tied up through tariff based competitive
bidding.
4.
Clarifications
In view of the position explained above, following clarifications are
issued:
(i)
Deemed export benefits are not available for supplies to NonMega Power Projects.
(ii)
Para 8.2(f)(1) and para 8.2(f)(ii) of FTP are in continuation and
hence to be read in conjunction. Para 8.2(f)(ii) of FTP lays down conditions
in respect of supplies covered under para 8.2(f)(i) of FTP.
(iii)
Benefits of deemed exports under para 8.2(f) are available only
if supplies are under ICB, except for Mega Power Projects. For Mega
Power projects it could be ICB or other than ICB, as given in para 3 above.
Para 8.3(c)(i) and para 8.4 of FTP (table given in this para) clearly provide
that if supplies are under ICB, then such supplies are exempted from
payment of TED. If supplies are not under ICB, then such supplies are
eligible for refund.
Date Time-29/05/2013
14 (RE - 2012)/
2009-14

Paragraph 8.2(f) of Foreign Trade Policy provides for grant of deemed


export benefits to supply of goods required for setting up any Mega Power

Clarification on
availability of
Deemed Export
Benefits for
supply of goods
to Mega Power
Projects

Project, as specified in Sl.No.507 of Notification issued by Department of


Revenue (DoR) bearing No.12/2012-Customs dated 17.03.2012, as
amended from time to time.
2.
DoR has issued Notification No.49/2012-Customs dated
10.09.2012, amending entry in Sl.No.507 of DoR Notification No.12/2012Customs dated 17.03.2012, cited at para 1 above. After this amendment,
clarifications have been sought regarding availability of Deemed Export
Benefits for supply of goods to Mega Power Projects.
3.
As per amendment referred in para 2, benefit of zero duty import
is available only for such Mega Power Project, specified in List 32A,
appended to Notification No.49/2012-Customs, so certified by an officer,
not below the rank of Joint Secretary to the Government of India, in the
Ministry of Power before 19th day of July, 2012. Only 111 Mega Power
Projects have been included in list 32A of Notification No.49/2012-Customs
dated 10.09.2012. This list is given in Annexure to this Circular.
Accordingly, deemed export benefits will be available for supply to these
111 projects, subject to the conditions of above stated DoR Notification,
provisions of Foreign Trade Policy and Handbook of Procedures.
(Jay Karan Singh)
Joint Director of Foreign Trade
E-mail:jaykaran.singh@nic.in
(F.No.01/92/180/126/AM-13/PC-VI)
Enclosure: List of 111 projects, as available on List 32A of Notification
No.49/2012-Customs dated 10.09.2012 (4 pages).
Annexure to Policy Circular No. 14(RE-2012)2009-14
dated
4.2.2013
1
Parbati-II, Himachal Pradesh - 4x200=800 MW (NHPC)
2
Teesta- V, Sikkim - 3x170=510 MW (NHPC)
3
Sipat-II, Chhattisgarh - 2x500=1000 MW (NTPC)
4
Vindhyachal-III, Madhya Pradesh - 2x500=1000 MW (NTPC)
5
Talcher-II, Orissa - 4x500=2000 MW (NTPC)
6
Rihand-II, Uttar Pradesh - 2x500=1000 MW (NTPC)
7
Sipat-I, Chhattisgarh - 3x660=1980 MW (NTPC)
8
Kahalgaon-II Phase-I & II Bihar - 3x500=1500 MW (NTPC)
9
Barh, Bihar - 3x660=1980 MW (NTPC)
10
Koldam, Himachal Pradesh - 4x200=800 MW (NTPC)
11
Tuticorin, Tamil Nadu- 2x500=1000 MW (NLC)
12
Parbati-III, Himachal Pradesh - 4x130=520 MW (NHPC)
13
Jhanor Gandhar CCPP-II, Gujarat - 2x650=1300 MW (NTPC)
14
Kawas CCPP-II, Gujarat - 2x650=1300 MW (NTPC)
15
RGPPL, Maharashtra - 2150 MW (JV of NTPC/ GAIL/ Govt. of
Maharashtra)
16
Tapovan Vishnugad HEP, Himachal Pradesh - 4x130=520 MW
(NTPC)
17
Simhadri-II, Andhra Pradesh - 2x500=1000 MW (NTPC)
18
Indira Gandhi STPP-JV project, Haryana - 3x500=1500 MW (NTPC)

19
Bongaigaon, Assam - 3x250=750 MW (NTPC)
20
Barh-II, Bihar - 1320 MW (NTPC)
21
Koderma TPS St-I, Jharkhand 1000 MW (DVC)
22
Durgapur Steel TPS, West Bengal - 2x500=1000 MW (DVC)
23
Tehri Pump Storage Project 4x250=1000 MW (THDC)
24
Mauda, Maharashtra 2x500=1000 MW (NTPC)
25
Rihand- III, Uttar Pradesh - 2 x 500=1000 MW (NTPC)
26
Nabinagar- JV with Railways, Bihar - 4 x 250=1000 MW (NTPC)
27
Vallur Stage- I Phase I & II, Tamil Nadu - 3 x 500=1500 MW (NTPCTamil Nadu Energy Co. Ltd.)
28
Raghunathpur TPS Phase 1, West Bengal - 2 x 600=1200 MW
(DVC)
29
Tanda- II, Uttar Pradesh-2 x 660=1320 MW (NTPC)
30
Meja, Uttar Pradesh - 2 x 660=1320 MW (NTPC)
31
Vindhyachal-IV, Madhya Pradesh - 2 x 500=1000 MW (NTPC)
32
Solapur STPP, Maharashtra - 2x660=1320 MW (NTPC)
33
Nabinagar STPP, JV with Bihar, Bihar-3x660=1980 MW (NTPC)
34
Mouda STPP-II, Maharashtra- 2x660= 1320 MW (NTPC)
35
Raghunathpur TPS (Ph-II), West Bengal- 2x660=1320 MW (DVC)
36
North Karanpura STPP, Jharkhand- 3x660=1980 MW (NTPC)
37
Kudgi STPP stage-I, Karnataka- 3x800=2400 MW (NTPC)
38
Darlipalli STPP, Stage-I Orissa- 2x800=1600 MW (NTPC)
39
Barethi STPP, Madhya Pradesh- 6x660=3960 MW (NTPC)
40
Lara STPP, Chhattisgarh -2x800=1600 MW (NTPC)
41
Gajmara STPP Stage-I - 2x800= 1600MW (NTPC)
42
Rajiv Gandhi CCPP Stage- II Phase-I, Kerala- 3x350 =1050 MW
(NTPC)
43
Gidderbha STPP, Punjab - 4x660= 2640 MW (NTPC)
44
Khargone Super TPP, M.P. - 2x660= 1320 MW (NTPC)
45
Gadarwara Super TPP, M.P. - 2x660= 1320 MW (NTPC)
46
Katwa Super TPP, West Bengal - 2x800= 1600 MW (NTPC)
47
Bilhapur STPP, Uttar Pradesh -2x660= 1320 MW (NTPC)
48
Talcher STPP Stage-III, Orissa - 2x660=1320 MW (NTPC)
49
Khedar (Hissar), Haryana - 1000 (+200) MW (HPGCL)
50
Khandwa, Madhya Pradesh - 2x500= 1000 MW (MPPGCL)
51
Gas based CCPP Pragati-III, Delhi-1371.6 MW (Pragati Power Corp.
Ltd.)
52
Sri Damodaran Sanjeevaiah, Nellaturu, Andhra Pradesh 2x800=1600 MW (APPDCL)
53
Chandrapur Expansion, Maharashtra- 2x500= 1000 MW (MSPGCL)
54
Koradi Expansion, Maharashtra- 3x660= 1980 MW (MSPGCL)
55
Bhusawal Expansion, Maharashtra- 2x500= 1000 MW (MSPGCL)
56
Supercritical TPP at STPS Stage-V at Suratgarh, Rajasthan- 2x660)=
1320 MW (RRVUNL)
57
Supercritical TPP at Chhabra, Rajasthan - 2x660= 1320 MW
(RRVUNL)
58
North Chennai, Tamil Nadu-2x600=1200 MW (TNEB)
59
Purulia Pump Storage Hydel Project, West Bengal- 4x225= 900 MW
(State Sector)
60
Sagardighi TPP Ext. Unit 3&4, West Bengal-2x500=1000 MW
(WBPDCL)
61
Shree Singaji TPP-2x660 (MP Power Generating Company Ltd MW
(MPPGCL)
62
Krishnapatnam UMPP, Andhra Pradesh- 6x660= 3960 MW (Coastal

Andhra Power Ltd.)


63
Mundra UMPP, Gujarat- 5x800= 4000 MW (Coastal Gujarat Power
Ltd.)
64
Sasan, Madhya Pradesh- 6x660= 3960 MW (Sasan Power Ltd.)
65
Tilaiya UMPP, Jharkhand- 5x800= 4000 MW (Jharkhand Integrated
Power Ltd.)
66
Orissa UMPP, Orissa- 5x800= 4000 MW
67
Chhattisgarh UMPP, Chhattisgarh- 5x800= 4000 MW
68
Cheyyur UMPP,- 5x800= 4000MW
69
Raigarh TPP, Chhattisgarh- 4x250= 1000 MW (M/s. Jindal Power
Ltd.)
70
Akhakhol GBPP, Gujarat- 3x382.5= 1147.5 MW (M/s. Jindal Power
Ltd.)
71
Udupi (Nagarjuna) Power Project, Karnataka- 2x600= 1200 MW (M/s.
Udupi (Nagarjuna) Power Corp. Ltd.)
72
IPP project Haryana- 2x660= 1320 MW (M/s. Jhajjar Power Ltd.)
73
726 MW CCGT being developed by ONGC-Tripura Power Company
Ltd. (OTPC) at Palatana, Tripura-(2x250)(2x113.3)= 726 MW
74
Salaya TPP, Gujarat- 2x600= 1200 MW (M/s. Essar Power Gujarat
Ltd.)
75
Tiroda TPP, Maharashtra-5x660=3300 MW (M/s. Adani Power
Maharashtra Ltd.)
76
Kawai TPP, Rajashtan - 2x660=1320 MW (M/s. Adani Power
Rajasthan Ltd.)
77
Teesta-VI, Sikkim - 4x125= 500 MW (M/s. Lanco)
78
Teesta-III Sikkim- 6x200= 1200 MW (M/s. Teesta Urja Ltd.)
79
KSK Mahanadi Power Company Ltd.(U-3 & 4) Janjgir- Champa,
Chhathisgarh-2x600=1200 MW (M/s KSK Mahanadi Power Co Ltd.)
80
Rajpura TPP in the State of Punjab- 2x700= 1400 MW (M/s. Nabha
Power Ltd.)
81
Talwandi Sabo power project at Banawala, Punjab.- 3x660=1980
MW (M/s. Talwandi Sabo Power Ltd. (TSPL))
82
TPP at Nandgaonpeth, MIDC, Amravati Dist,. Maharashtra.- 5x270=
1350 MW (M/s. Indiabulls Power Ltd.)
83
TPP at Karachhana, Allahabad, UP- 2x660 = 1320 MW (M/s.
Sangam Power Gen Company Ltd.)
84
TPP at Bara, Allahabad, UP. -3x660=1980 MW (M/s. Prayagraj
Power Gen. Company Ltd.)
85
TPP at Surguja, Chhattisgarh- 2x660 = 1320 MW (M/s. IFFCO
Chhattisgarh Power Ltd.)
86
TPP at Dhenkanal, Orissa-3x350=1050 MW (M/s. GMR Kamalanga
Energy Ltd.)
87
GMR Chhattishgarh Energy Ltd. Raipur, Chhattisgarh-2x685 MW
88
KSK Mahanadi Power Corporation Ltd. (U-2&5) Janjgir Champa,
Chhattisgarh-2x600 MW
89
KSK Mahanadi Power Corporation Ltd. (U-1&6) Janjgir Champa,
Chhattisgarh-2x600 MW
90
Thermal Powertech Corporation Ltd. Pynampuram Andhra Pradesh2x660 MW
91
KVK Neelanchal Power Pvt. Ltd Cuttak, Orissa-3x350 MW
92
East-Coast Energy Pvt. Ltd Srikakulam, Andhra Pradesh.-2x660 MW
93
Monnet Power Corporation Ltd. Malibrahmani, Orissa-2x525 MW
94
Hinduja National Power Corporation Ltd. Vishakhapatnam, Andhra
Pradesh-2x520 MW

95
Corporate Power Ltd. Chandwa, Jharkhand-4x270 MW
96
Lanco Power Ltd. (U-3,4) Pathadi, Chhattisgarh-2x660 MW
97
Lalitpur Power Generation Company Ltd. Lalitpur, U.P.-3x660 MW
98
Lanco Vidarbha Thermal Power Ltd. Wardha, Maharashtra-2x660
MW
99
Lanco Babandh Power Ltd. Dhenkanal, Orissa-2x660 MW
100 DB Power Ltd. Vadodarha TPP Janjgir Champa Chattisgarh-2x660
MW
101 Athena Chhattisgarh Power Ltd. Singhitarai TPS Janjgir-Champa,
Chattisgarh- 2x600 MW
102 Essar Power Jharkhand Ltd. Tori, Jharkhand- 2x600 MW
103 MB Power (MP) Ltd. Anuppur, Madhya Pradesh-2x600 MW
104
RKM Powergen Pvt. Ltd. Uchpinde TPP Janjgir- Champa,
Chattisgarh-4x360 MW
105 IL & FS Tamil Nadu Power Company Ltd. Cuddalore, Tamil Nadu2x600 MW
106 Meenakshi Energy Pvt. Ltd Thamminapatanam, Andhra Pradesh-Ph1:2x 150 Ph-II 2x350 MW
107 SKS Power Generation (Chhattisgarh) Ltd. Binj Kote TPP Raigarh,
Chhattisgarh-4x300 MW
108 Jindal India Thermal Power Ltd. Angul, Orissa- 2x600 MW
109 NCC Power Projects Nellore AP-2x660 MW
110 Samalkot Power Ltd. Samalkot, Andhra Pradesh-2400 MW
111 Torrent Energy Ltd. Dahej, Gujarat-1200 MW
Note : This is IDENTICAL to the projects included in List 32A of
Notification No.49/2012-Customs dated 10.9.2012
Date Time-05/02/2013
8.3
Deemed exports shall be eligible for any / all of following benefits in respect
B e n e f i t s f o r of manufacture and supply of goods qualifying as deemed exports subject
Deemed Exports to terms and conditions as in HBP v1:(a) Advance Authorisation / Advance Authorisation for annual requirement /
DFIA.
(b) Deemed Export Drawback.
(c) Refund of terminal excise duty will be given if exemption is not available.
Exemption from TED is available to the following categories of supplies:
(i) Supply against ICB;
(ii) Supplies of intermediate goods, against invalidation letter, made by an
Advance Authorisation holder to another Advance Authorisation holder; and
(iii) Supplies of goods by DTA unit to EOU/ EHTP/ STP/ BTP unit
Thus such categories of supply which are exempt ab initio will not be
eligible to receive refund of TED.
Notification
04

( R E - 2 0 1 3 ) / 2.

The existing paragraphs 8.3 (c) and 8.4 in the FTP are substituted

2009-2014

by amended paragraphs 8.3(c) and 8.4 as given below:


(i) InTED
Exemption
ICB.
from
Authorisation
Authorisation
ultimate
other
Existing
exporter.
shall
from
cases,
if holder
such
Paragraph
also
terminal
refund
manufacturer,
be
to available
excise
of
a8.3
terminal
manufacturer
(c)duty
in
for
excise
turn,
where
supplies
supplies
duty
holding
supplies
will
made
the
be
another
are
given.
by
product(s)
made
anExemption
Advance
Advance
against
to an
Amended
Refund
Exemption
(i)
(ii)
made
Authorisation
(iii)
by
ofParagraph
Supplies
an
terminal
from
Supplies
Supplies
Advance
holder;
TEDof
excise
against
is
8.3
goods
ofavailable
and
intermediate
(c)
Authorisation
duty
by
ICB;
DTA
will
to be
the
unit
given
goods,
following
toholder
EOU
if against
exemption
/ categories
EHTP
to another
invalidation
/ STP
is not
of/ supplies:
BTP
Advance
available.
letter,
unit
Thus such categories of supply which are exempt ab initio will not be
eligible to receive refund of TED.Date Time-18/04/2013

Circular
16 (RE-2012)
/2009-14
Clarification
regarding TED
Refund where
TED exemption is
available

It has come to the notice of this Directorate that some RAs of DGFT and
the Offices of Development Commissioners of SEZ are providing refund of
TED even in those cases where supplies of goods, under deemed exports,
is ab-initio exempted.
2.
There are three categories of supplies where supply of goods,
under deemed exports, are ab- initio exempted from payment of excise
duties. These are as follows:
(i)
Supply of goods under Invalidation letter issued against Advance
Authorisation [Para 8.3 of FTP];
(ii)
Supply of goods under ICB [Para 8.3(c) of FTP]; and
(iii)
Supply of goods to EOUs [Para 6.11(c) (ii) of FTP]
3.
Prudent financial management and adherence to discipline of
budget would be compromised if refund is provided, in cases, where
exemption is mandated. In fact, in such cases the relevant taxes should not
have been collected to begin with. And if, there has been an error/oversight
committed, then the agency collecting the tax would refund it, rather than
seeking reimbursement from another agency. Accordingly, it is clarified that
in respect of supplies, as stated at Para 2 above, no refund of TED should
be provided by RAs of DGFT/Office of Development Commissioners,
because such supplies are ab-initio exempted from payment of excise duty.
4.

This issue with the approval of DGFT.

(Jay Karan Singh)


Joint Director of Foreign Trade
Telphone No.23063249
E-mail: jaykaran.singh@nic.in
Date Time-15/03/2013
8.4
Following table shows the benefits available to different categories of
Benefits to the supplies as mentioned in Para 8.2 above. In respect of such supplies
Supplier
supplier shall be entitled to the benefits listed in paragraphs 8.3 (a), (b) &
(c) of the Policy, whichever is applicable.

Relevant sub-para of
8.2

Benefit available as given in Para 8.3, whichever is a


(a)

(b)

(a)

Yes
(for intermediate
supplies against an
invalidation letter)

Yes
(i) Exempti
(against ARO or Back invalidation
to Back letter of credit) (ii) Refund
ARO or ba
letter of cre

(b)

Yes

Yes

(c)

Yes

Yes

(d)

Yes

Yes

(f)

Yes

Yes

(i) Ex
(ii) Exemp
Refund, if

(h)

No

Yes

Re

(i)

Yes

Yes

(j)

Yes

Yes

Exe

Re

Exe

Re

Notification
04 (RE-2013)/
2009-2014
Amendments in
Paragraph 8.3 (c)
and Paragraph 8.4
of
the
FTP
pertaining to
deemed exports
s c h e m e R e g a r d i n g

2.
The existing paragraphs 8.3 (c) and 8.4 in the FTP are substituted
by amended paragraphs 8.3(c) and 8.4 as given below:

(ii)supplies
of
supplier
(c)
of the
Following
Existing
shall
Policy,
asbe
mentioned
Paragraph
whichever
entitled
table shows
tointhe
is
8.4
Para
applicable.
the
benefits
8.2
benefits
above.
listed
available
in
In
respect
to different
such
8.38.3,
categories
(a),
supplies
(b) &
Benefit
available
asparagraphs
given
inofPara
whichever
is a
(a)

(b)

Yes
(for supplies)
intermediate

Yes
(against
to Back
credit)
ARO
letter
or Back
of

(b)

Yes

Yes

Yes

(c)

Yes

Yes

Yes

(d)

Yes

Yes

Yes

(f)

Yes

Yes

Yes

(h)

No

Yes

Yes

(i)

Yes

Yes

No

(j)

Yes

Yes

Yes

Relevant
para
of 8.2
sub(a)

(Againstlette
AR

(c)
Amended
Following
supplies
supplier
of the
shall
as
Policy,
Paragraph
table
mentioned
be whichever
entitled
shows
8.4in
the
toPara
the
isBenefit
benefits
applicable.
benefits
8.2 available
above.
available
listedIn
into
respect
paragraphs
different
such
categories
8.3
supplies
(b) of
& is app
Relevant
para
of 8.2
subas
given
in of
Para
8.3,(a),
whichever
(a)

(b)

(c

(a)

Yes
supplies
invalidation
(for intermediate
against
letter)
an

Yes
(i) Exemption in ca
Back
(against
of
tocredit)
Back
AROletter
or back
(ii) Refund
letter ofincredit
case

(b)

Yes

Yes

(c)

Yes

Yes

(d)

Yes

Yes

(f)

Yes

Yes

(i) Exemption
(ii) Exemption, if ICB
Refund, if withou

(h)

No

Yes

Refu

(i)

Yes

Yes

(j)

Yes

Yes

Refu

Exem

Refu

Exem

Date Time-18/04/2013
8.4.1

This paragraph is deleted because the contents of this paragraph reflected


in table given in paragraph 8.4 above.

8.4.2

This paragraph is deleted because the contents of this paragraph reflected


in table given in paragraph 8.4 above.

8.4.3

This paragraph is deleted because the contents of this paragraph reflected


in table given in paragraph 8.4 above.

8.4.4

(i) This paragraph is deleted because the contents of this paragraph


reflected in table given in paragraph 8.4 above.
(ii) This paragraph is deleted because the contents of this paragraph
reflected in paragraphs 8.2(d) and 8.4 above.
(iii) This paragraph is deleted because the contents of this paragraph
reflected in paragraph 8.2 (f) above.
(iv) This paragraph is deleted because the contents of this paragraph
reflected in paragraphs 8.2 and 8.4 above.
(v) Deleted

8.4.5

Deleted.

8.4.6

This paragraph is deleted because the contents of this paragraph reflected


in table given in paragraph 8.4 above.

8.4.7

This paragraph is deleted because the contents of this paragraph reflected


in paragraphs 8.2 and 8.4 above.

8.5
Supply of goods will be eligible for refund of terminal excise duty in terms of
E l i g i b i l i t y f o r Para 8.3(c) of FTP, provided recipient of goods does not avail CENVAT

refund of terminal credit/rebate on such goods. A declaration to this effect, in Annexure II of


e x c i s e d u t y / ANF 8, from recipient of goods, shall be submitted by applicant. Similarly,
drawback
supplies will be eligible for deemed export drawback in terms of para 8.3 (b)
of FTP of Central Excise duty paid on inputs/components, provided
CENVAT credit /rebate has not been availed of such duty paid by supplier
of goods. A declaration to this effect, in Annexure III of ANF 8, from supplier
of goods, shall be submitted by applicant. Such supplies shall however be
eligible for deemed export drawback on customs duty paid on
inputs/components.
Circular
9 (RE-2013)/ 200914
Clarification on
requirement of
C E N V A T
declaration as per
PN 35 dated
01.03.2011

Representations have been received from trade and industry seeking


clarifications relating to declaration prescribed under Public Notice No.35,
dated 01.03.2011. Issues raised in these representations have been
examined.
2.

Para 8.5 of the FTP provides as follows:

Similarly, supplies will be eligible for deemed export drawback in terms of


para 8.3(b) of FTP of Central Excise duty paid on inputs/components,
provided CENVAT credit/rebate has not been availed of such duty paid by
supplier of goods. A declaration to this effect, in Annexure III of ANF 8,
from supplier of goods, shall be submitted by applicant. Such supplies
shall, however, be eligible for deemed export drawback on custom duty
paid on inputs/components.
3.
As required under Para 8.5 of FTP, applicant has to give
declarations regarding non-availment of CENVAT credit/rebate, as given in
Public Notice No.35, dated 01.03.2011.
4.
Accordingly, deemed export drawback, in terms of Para 8.3(b) of
FTP, including as per Column B of All Industry Rate of Duty Drawback
under Duty Drawback Schedule of Department of Revenue, is not
admissible if facility of CENVAT credit/rebate has been availed. This is
because if the CENVAT facility/rebate facility has been claimed, then
central excise duty component on the inputs is already compensated.
However, if basic custom duty has been paid, then same is refundable as
Para 8.5 of FTP clearly prescribes such supplies shall however be eligible
for deemed export drawback on custom duty paid on inputs/components.
Such basic custom duty paid can be taken back, as brand rate of duty
drawback, based on actual duty paid documents, as per procedure
prescribed in Chapter 8 of FTP and Chapter 8 of HBP Volume-I.
5.
All Industry Rate of Duty Drawback, as notified by Department of
Revenue, wherever admissible, also includes service tax component on

input services. While giving a declaration for non-availment of CENVAT


credit, applicant has to ensure that it has also not claimed CENVAT credit
on service tax on input services. While making an application, applicant
must ensure that it does not claim double benefit of CENVAT credit
and
duty drawback.
6.

This issues with the approval of DGFT.

(Jay Karan Singh)


Joint Director General of Foreign Trade
E-mail:jaykaran.singh@nic.in
(F.No.01/92/180/85/AM-12/PC VI)
Date Time-30/10/2013
8.5.1

Simple interest @ 6% per annum will be payable on delay in refund of duty


drawback and terminal excise duty under deemed export scheme if the
case is not settled within 30 days of receipt of complete application (as in
paragraph 9.10.1 of HBP v1).

8.6.1
Supplies to be
made by the main
/ sub-contractor

In all cases of deemed exports, supplies shall be made directly to


designated Projects / Agencies / Units / Advance Authorisation / EPCG
Authorisation holders. Sub-contractor may, however, make supplies to main
contractor instead of supplying directly to designated projects / Agencies.
Such Supplies shall be eligible for deemed export benefits as per procedure
laid down in paragraph 8.4 of HBP v1.

8.6.2

Supplies made by an Indian sub-contractor of an Indian or foreign main


contractor directly to the designated projects / Agencies, shall also be
eligible for deemed export benefits provided name of sub-contractor is
indicated either originally or subsequently in the main contract (but before
the date of supply of such goods) and payment certificate is issued by
project authority in the name of sub-contractor as in Appendix 22C of HBP
v1.

8.7

Deleted.

8.8.1
Miscellaneous

On Cement, deemed export benefits shall be available for supplies under


Para 8.2(d) only.

8.8.2

On Steel, deemed export benefit shall be available only for supply (a)
under Para 8.2 (d); or (b) as an input under an Advance
Authorisation/Annual Advance Authorisation/DFIA; or (c) as an input to an
EOU for making goods.

8.8.3

On Fuel, deemed export benefit is available only for supplies to (a)


petroleum operations under Sr. No. 356, 358 to 360 of Customs Notification

No.12/2012 Cus dated 17.03.2012, Para 8.2 (f) of FTP; or (b) to EOUs; or
(c) to Advance Authorisation holder/Annual Advance Authorisation holder.

CHAPTER-9
DEFINITIONS
9.1

For purpose of FTP, unless context otherwise requires, the following words
and expressions shall have the following meanings attached to them:-

9.10

BoA means the Board of Approval as notified by DoC.

9.11

BTP means Biotechnology Park as notified by DGFT on recommendation of


Department of Biotechnology.

9.12

Capital Goods means any plant, machinery, equipment or accessories


required for manufacture or production, either directly or indirectly, of goods
or for rendering services, including those required for replacement,
modernisation, technological upgradation or expansion. It also includes
packaging machinery and equipment, refractories for initial lining,
refrigeration equipment, power generating sets, machine tools, catalysts for
initial charge, equipment and instruments for testing, research and
development, quality and pollution control. Capital goods may be for use in
manufacturing, mining, agriculture, aquaculture, animal husbandry,
floriculture, horticulture, pisciculture, poultry, sericulture and viticulture as
well as for use in services sector.

Notification
8 (RE-2012) /2009- 3. Definition of Capital Goods in Para 9.12 of FTP has been amended and
2014
will now read as under:
.
"Capital Goods" means any plant, machinery, equipment or accessories
required for manufacture or production, either directly or indirectly, of goods
or for rendering services, including those required for replacement,
modernisation, technological upgradation or expansion. It also includes
packaging machinery and equipment, refractories for initial lining,
refrigeration equipment, power generating sets, machine tools, catalysts for
initial charge plus one subsequent charge, equipment and instruments for
testing, research and development, quality and pollution control.
Capital goods may be for use in manufacturing, mining, agriculture,
aquaculture, animal husbandry, floriculture, horticulture, pisciculture,
poultry, sericulture and viticulture as well as for use in services sector.Date
Time-26/07/2012
9.13

Competent Authority means an authority competent to exercise any power

or to discharge any duty or function under the Act or the Rules and Orders
made thereunder or under FTP.
9.14

Component means one of the parts of a sub-assembly or assembly of


which a manufactured product is made up and into which it may be
resolved. A component includes an accessory or attachment to another
component.

9.15

Consumables means any item, which participates in or is required for a


manufacturing process, but does not necessarily form part of end-product.
Items, which are substantially or totally consumed during a manufacturing
process, will be deemed to be consumables.

9.16

Consumer Goods means any consumption goods, which can directly satisfy
human needs without further processing and includes consumer durables
and accessories thereof.

9.17

"Counter Trade" means any arrangement under which exports/imports


from/to India are balanced either by direct imports/exports from
importing/exporting country or through a third country under a Trade
Agreement or otherwise.
Exports / Imports under Counter Trade may be carried out through Escrow
Account, Buy Back arrangements, Barter trade or any similar arrangement.
Balancing of exports and imports could wholly or partly be in cash, goods
and/or services.

9.18

"Developer" means a person or body of persons, company, firm and such


other private or government undertaking, who develops, builds, designs,
organises, promotes, finances, operates, maintains or manages a part or
whole of infrastructure and other facilities in SEZ as approved by Central
Government and also includes a co-developer.

9.19

"Development Commissioner" means Development Commissioner of SEZ.

9.2

Accessory or "Attachment" means a part, sub-assembly or assembly that


contributes to efficiency or effectiveness of a piece of equipment without
changing its basic functions.

9.20

"DFRC" means Duty Free Replenishment Certificate (as given in FTP


2004-09).

9.21

"Domestic Tariff Area (DTA)" means area within India which is outside
SEZs and EOU/ EHTP/ STP/BTP.

9.22

"Drawback in relation to any goods manufactured in India and exported,

means rebate of duty chargeable on any imported material or excisable


material used in manufacture of such goods in India. Goods include
imported spares, if supplied with capital goods manufactured in India.
9.23

"EHTP" means Electronic Hardware Technology Park.

9.24

"EOU" means Export Oriented Unit for which an LOP has been issued by
Development Commissioner.

9.25

"Excisable goods" means any goods produced or manufactured in India


and subject to a duty of excise under Central Excise and Salt Act 1944 (1 of
1944).

9.26

"Exporter" means a person who exports or intends to export and holds an


IEC number, unless otherwise specifically exempted.

9.27

"Export Obligation" means obligation to export product or products covered


by Authorisation or permission in terms of quantity, value or both, as may
be prescribed or specified by Regional or competent authority.

9.27.1

FTP means the Foreign Trade Policy which specifies policy for exports
and imports under Section 5 of the Act.

9.28

Group Company means two or more enterprises which, directly or


indirectly, are in a position to :(a) exercise twenty-six per cent, or more of voting rights in other enterprise;
or
(b) appoint more than fifty percent, of members of board of directors in the
other enterprise.
For group companies to claim benefits or have their exports counted for
benefits to be claimed by another member of group, the group company
should have been in existence at least 2 years prior to date of application
under any of export promotion schemes notified in FTP.

Notification
58 (RE-2013)/
2009-2014
Amendment in
Para 9.28 of
Foreign Trade
Policy, 2009-2014

S.O. (E): In exercise of powers conferred under Section 5 of the Foreign


Trade (Development and Regulation) Act, 1992 read with paragraph 1.3 of
the Foreign Trade Policy, 2009-2014, as amended from time to time, the
Central Government hereby notifies the following amendment in the Para
9.28 of Foreign Trade Policy, 2009-2014:
2.
The definition of Group Company in Para 9.28 of Foreign Trade
Policy, 2009-2014 is amended to read as under:
Group Company means two or more enterprises which, directly or
indirectly, are in a position to:-

(a) exercise twenty-six per cent or more of voting rights in other enterprise;
or
(b) appoint more than fifty percent of members of board of directors in the
other enterprise.
The term Enterprise used above would include (i) Public Limited
Company, (ii) Private Limited Company and (iii) Limited Liability
Partnership (LLP), but not a partnership firm or a proprietorship firm.
For group companies to claim benefits or have their exports counted for
benefits to be claimed by another member of group, the group company
should have been in existence at least 2 years prior to date of application
under any of export promotion schemes notified in FTP.
3.
Effect of this Notification:
Para 9.28 of FTP has been amended to include Limited Liability
Partnerships (LLPs) in the definition of Group Company. Neither
partnership nor proprietorship firm would come within the ambit of definition
of a Group Company.
Sd/(Anup K. Pujari)
Director General of Foreign Trade
dgft@nic.in
[Issued from F. No. 01/93/180/58/AM-09/PC-2(B) Part]Date Time18/12/2013
9.29

HBP v1 means the Handbook of Procedures (Volume 1) containing the


procedures (including Appendices & Aayat Niryat Forms), HBP v2 means
Handbook of Procedures (Volume 2) containing the SIONs; both published
under provisions of paragraph 2.4 of FTP.

9.3

Act means Foreign Trade (Development and Regulation) Act, 1992 (No.22
of 1992) [FT(D&R) Act].

9.30

"Importer" means a person who imports or intends to import and holds an


IEC number, unless otherwise specifically exempted.

9.31

"Infrastructure facilities means" industrial, commercial and social


infrastructure or any other facility for development of SEZ as notified.

9.32

"ITC (HS)" means ITC (HS) Classifications of Export and Import Items.

9.33

"Jobbing" means processing or working upon of raw materials or semifinished goods supplied to job worker, so as to complete a part of process
resulting in manufacture or finishing of an article or any operation which is
essential for aforesaid process.

9.34

"Licensing Year" means period beginning on the 1st April of a year and

ending on 31st March of following year.


9.35

"Managed Hotel" means hotels managed by a three star or above hotel/


hotel chain under an operating management contract for a duration of at
least three years between operating hotel/ hotel chain and hotel being
managed. Management contract must necessarily cover the entire gamut of
operations/ management of managed hotel.

9.36

"Manufacture" means to make, produce, fabricate, assemble, process or


bring into existence, by hand or by machine, a new product having a
distinctive name, character or use and shall include processes such as
refrigeration, re-packing, polishing, labelling, Re-conditioning repair,
remaking, refurbishing, testing, calibration, re-engineering.
Manufacture, for the purpose of FTP, shall also include agriculture,
aquaculture, animal husbandry, floriculture, horticulture, pisciculture,
poultry, sericulture, viticulture and mining.

9.37

"Manufacturer Exporter" means a person who exports goods manufactured


by him or intends to export such goods.

9.38

"MAI" means Market Access Initiative Scheme notified by Department of


Commerce.

9.39

Merchant Exporter means a person engaged in trading activity and


exporting or intending to export goods.

9.4

Actual User means an actual user who may be either industrial or nonindustrial.

9.40

"NC" means the Norms Committee in the Directorate General of Foreign


Trade, for recommending grant of Authorisations under Duty Exemption
Scheme and for recommending Input Output norms and value addition
norms to be notified by DGFT.

9.41

"NFE" means Net Foreign Exchange.

9.42

"Notification" means a notification published in Official Gazette.

9.43

"Order" means an Order made by Central Government under the Act.

9.44

"Part" means an element of a sub-assembly or assembly not normally


useful by itself, and not amenable to further disassembly for maintenance
purposes. A part may be a component, spare or an accessory.

9.45

"Person" includes an individual, firm, society, company, corporation or any


other legal person including the DGFT officials.

9.46

"Policy" means FTP 2009-2014 as amended from time to time.

9.47

"Prescribed" means prescribed under the Act or the Rules or Orders made
thereunder or under FTP.

9.48

"Public Notice" means a notice published under provisions of paragraph 2.4


of FTP.

9.49

"Raw material" means basic materials which are needed for manufacture of
goods, but which are still in a raw, natural, unrefined or unmanufactured
state; and for a manufacturer, any materials or goods which are required for
his manufacturing process, whether they have actually been previously
manufactured or are processed or are still in a raw or natural state.

9.49.1

"Regional Authority" means authority competent to grant an Authorisation


under the Act / Order.

9.5

Actual User (Industrial) means a person who utilises imported goods for
manufacturing in his own industrial unit or manufacturing for his own use in
another unit including a jobbing unit.

9.50

"Registration-Cum-Membership Certificate" (RCMC) means certificate of


registration and membership granted by an Export Promotion Council /
Commodity Board / Development Authority or other competent authority as
prescribed in FTP or HBP v1.

9.51

"Rules" means Rules made by Central Government under Section 19 of the


Act.

9.52

"Services" include all tradable services covered under General Agreement


on Trade in Services (GATS) and earning free foreign exchange.

9.53

"Service Provider" means a person providing


(i) Supply of a service from India to any other country;
(ii) Supply of a service from India to service consumer of any other country
in India;
(iii) Supply of a service from India through commercial or physical
presence in territory of any other country.
(iv) Supply of a service in India relating to exports paid in free foreign
exchange or in Indian Rupees which are otherwise considered as having
being paid for in free foreign exchange by RBI.

9.54

"SEZ" means Special Economic Zone notified by Ministry of Commerce &

Industry, Department of Commerce.


9.55

"Ships" mean all types of vessels used for sea borne trade or coastal trade,
and shall include second hand vessels.

9.56

"SION" means Standard Input Output Norms notified by DGFT in HBP v2 /


approved by Board of Approval.

9.57

"Spares" means a part or a sub-assembly or assembly for substitution, that


is ready to replace an identical or similar part or sub-assembly or assembly.
Spares include a component or an accessory.

9.58

"Specified" means specified by or under the provisions of this Policy


through Notification / Public Notice.

9.59

"Status holder" means an exporter recognized as Export House / Trading


House /Star Trading House / Premier Trading House by DGFT /
Development Commissioner.

9.59.1

Stores means goods for use in a vessel or aircraft and includes fuel and
spares and other articles of equipment, whether or not for immediate fitting.

9.6

"Actual User (Non-Industrial)" means a person who utilises the imported


goods for his own use in
(a) any commercial establishment carrying on any business, trade or
profession; or
(b) any laboratory, Scientific or Research and Development (R&D)
institution, university or other educational institution or hospital; or
(c) any service industry.

9.60

STP means Software Technology Park

9.61

"Supporting Manufacturer" means any person who manufactures any


product or part/accessories/components of that product. Name of
supporting manufacturer as well as the exporter must be endorsed on
export documents.

9.62

"Third-party exports" means exports made by an exporter or manufacturer


on behalf of another exporter(s). In such cases, export documents such as
shipping bills shall indicate name of both manufacturing
exporter/manufacturer and third party exporter(s). BRC, GR declaration,
export order and invoice should be in the name of third party exporter.

9.63

"Transaction Value" is as defined in Customs Valuation Rules of

Department of Revenue.
9.64

"Wild Animal" means any wild animal as defined in Section 2(36) of Wildlife
(Protection) Act, 1972.

9.7

AEZ means Agricultural Export Zones notified by DGFT in Appendix 8 of


HBP v1.

9.8

Appeal is an application filed under section 15 of the Act and includes


such applications preferred by DGFT officials in government interest
against decision by designated adjudicating / appellate authorities.

9.9

"Applicant" means person on whose behalf an application is made and


shall, wherever context so requires, includes person signing the application.

9.9.1

Authorisation means a permission as included in Section 2 (g) of the Act


to import or export as per provisions of FTP.