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Accountability of inputs where Advance Authorisations are issued on net to net basis for parts/ components..

Circular No. ES/ 129/2018-19                                                                        July 23, 2018

To: Members of the Council

Sub:- Accountability of inputs where Advance Authorisations are issued on net to net basis for parts/ components

Dear Member,

We would like to inform you that DGFT has issued Policy Circular No.10/2018-19 dated 13th July, 2018 regarding Accountability of inputs where Advance Authorisations are issued on net to net basis for parts/ components.

As you are aware, SI.No-6 of General Note for all products of Standard Input Output Norms reads as under:

“Unless specified, otherwise, the import of components wherever allowed shall be permitted on net to net basis, i.e., without any wastage, with accountability clause and the type, technical specifications (including part No. if any), etc., of the components sought for import should conform to those utilized in the manufacture of the resultant product, which should be reflected in export documents (Shipping Bills) also. A condition to this effect shall be imposed on the licence.”

In this connection, DGFT has received representations from Trade and Industry informing the difficulties being faced by them in getting EODCs where inputs have been obtained on net to net basis subject to accountability clause in terms of SI No-6 of General Notes for All Export Products Groups. Exporters have declared the inputs in the shipping bill.

However, doubts have been raised whether declaring inputs in the shipping bill amounts to fulfillment of accountability clause as mentioned in the above general notes. Some exporters have not indicated model/part numbers of inputs imported duty free while making shipments.

To improve ease of doing business and to facilitate issuance of EODC, it has been decided by Office of DGFT that EODC shall be issued on the basis of the following:

  1. Exporter should invariably declare input quantities used in the export product in the relevant part of the shipping bill.
  2. Authorisation holder shall submit an accountability statement showing description and quantity of exported products and inputs consumed therein as per the annexed format.
  3. A certificate, as per annexed format (attached in the Policy Circular), from independent Chartered Engineer having domain knowledge, certifying that inputs imported are actually required for manufacturing of the resultant product and as per inventory; all imported inputs have been used in the resultant products. He shall also certify the quantity exported and item wise input quantity consumed.

The above will also be applicable for Advance Authorisations where EODC are pending irrespective of policy period.

Members may kindly make a note of the above and do the needful at the earliest.

Thanking you,

Yours faithfully,

S.BALARAJU
EXECUTIVE DIRECTOR

 

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