Circular No.ES/194/2017-18 October 20, 2017
To: Members of the Council
Sub: Amendments in Chapter-4 regarding Duty Exemption / Remission Scheme under Hand Book of Procedures 2015-2020, related to clubbing of Advance Authorisations, extension of Export Obligation period
DGFT has issued Public Notice No. 32/ 2015-2020 dated 18.10.2017 by making amendments in Chapter-4 regarding Duty Exemption / Remission Scheme under Hand Book of Procedures 2015-2020, related to clubbing of Advance Authorisations, extension of Export Obligation period
In this regard, the changes /additions which were made by DGFT are given below for your information and ready reference.
1)Para 4.38 ( Facility of Clubbing of Authorisations) of handbook of procedures 2015-20 is amended to read as under:
(i) No clubbing of Authorisations issued on or before 31st March, 2009 shall be allowed.
(ii) Request for clubbing shall be made in ANF - 4C to the concerned RA who has issued the Authorisations.
(iii) Facility of clubbing of Advance Authorisations shall be available only for redemption / regularisation of such Authorisations and no further import or export shall be allowed.
(iv) Facility of clubbing shall also be available for Advance Authorisations for Annual Requirement issued during Foreign Trade Policy period 2009- I4 and 20 I5-20, wherever exports and imports have taken place as per Standard Input Output Norms (SION) notified.
(v) Only Authorisations under which similar duty exemption has been availed shall only be allowed to be clubbed. Such Authorisations may pertain to different financial years.
(vi) In case, exports are made outside EO period of any Authorisation, EO extension may be allowed before clubbing of such authorisation, as per Para 4.42 of Handbook of procedures on payment of composition fee.
(vii) Only such Advance Authorisations shall be clubbed where exports under all Authorisations have been made within the initial/ extended EO period of the earliest issued Authorisation.
(viii) Clubbing shall be permitted only when there is shortfall in fulfillment of export obligation occurred in first authorisation and excess exports are made in subsequent Authorisations. However, this condition may not be insisted when validity period (for import) of Authorisations runs concurrently and imports made in subsequent authorisation falls within validity period (for import) of first authorisation and such import made within validity period of first authorisation are on pro-rata, equal to or in excess to the extent of exports made in first authorisation. Subsequent Authorizations issued after expiry of validity of first Authorisation shall not be allowed to be clubbed.
(ix) Clubbing of Authorisations issued with different EO periods shall also be allowed.
(x) Accounting of exports made outside expiry of initial or extended EO period of earliest issued authorisation shall not be taken into consideration for EO fulfillment after clubbing of such Authorisations.
(xi) Inputs which are common in all Authorisations shall only be clubbed and duty free inputs shall be accounted for as per SION/Ad-Hoc Norms fixed by NC. In other words all inputs covered in all Authorisations need not be same.
(xii) Minimum value addition as prescribed in FTP and Procedures for the export product will be required to be maintained on clubbing. Upon clubbing, if shortfall in value or quantity is noticed, the same shall be regularized under the provisions of Para 4.49 of HBP 2015-20.
(xiii) After clubbing, Authorisations shall for all purposes, be deemed to be one Authorisation. The value addition would be calculated on the basis of total CIF and total FOB arrived at after clubbing the Authorisations.
(xiv) No clubbing shall be permitted in respect of Authorisations where misrepresentation / fraud have come to the notice of RA. Further, no clubbing of Authorisations, where EODC/redemption letter has already been issued or adjudication orders have already been passed by RA/Customs Authority, shall be permitted.
(xv) Additional provisions for clubbing of Authorisations covered under Appendix-30A (issued under FTP 2009-14) / Appendix-4J (issued under FTP 2015-20) and Authorisations issued with EOP less than 18 months:
(a) Export obligation period of clubbed Authorisations shall be reckoned from the date of earliest import in any of the Authorisations proposed to be clubbed.
(b) Clubbing of such Authorisations shall be allowed provided all exports are completed within initial/extended Export Obligation period reckoned from date of earliest import in any of the Authorisations proposed to be clubbed.
2) Para 4.42 (d) (Export Obligation (EO) Period and its extension) is amended to read as under:
(d) Extension in export obligation period for Authorisations issued under Appendix-4J (issued under FTP 2015-20) shall be allowed for a period not more than the half of the stipulated export obligation period. In such cases, composition fee shall be levied @ 0.5% per month of unfulfilled FOB value, in case exports effected are more than 50% within initial Export Obligation period and @ 1% per month where less than 50% exports have been effected within initial export obligation period.
For more details and information on the above matter, members may kindly refer to the above Public Notice No. 32/ 2015- 2020.