Para

From

To

2.22

Re-import of goods repaired abroad

Capital goods, equipments, components, parts and accessories, whether imported or indigenous, may be sent abroad for repairs, testing, quality improvement or upgradation or standardisation of technology and re-imported without a licence / certificate / permission.

Capital goods, equipments, components, parts and accessories, whether imported or indigenous, except those restricted for export in the ITC(HS) Classification of Export & Import items, 2002-2007, may be sent abroad for repairs, testing, quality improvement of up-gradation or standardization of technology and re-imported without a licence/certificate/permission.

2.32

Export of Gifts

Goods, including edible items, of value not exceeding Rs.1,00,000/- 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 a licence / certificate / permission, except in the case of edible items.

Goods, including edible items, of value not exceeding Rs.5,00,000/- in a licensing year, may be exported as gift. However, items mentioned as restricted for exports in ITC(HS) shall not be exported as gift, without a licence/certificate/permission.

2.33

Export of Spares

Warranty spares, whether indigenous or imported, of plant, equipment, machinery, automobiles or any other goods may be exported alongwith the main equipment or subsequently but within the contracted warranty period of such goods subject to approval of RBI.

Warranty spares, whether indigenous or imported, of plant, equipment machinery, automobiles or any other goods, except those restricted for export in the ITC(HS) Classification of Export & Import items, 2002-2007, may be exported alongwith the main equipment or subsequently but within the contracted warranty period of such goods subject to approval of RBI.

2.38

Export of repaired goods

Goods or parts 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 a licence/ certificate/permission and in accordance with customs notification issued in this behalf.

Goods or parts, except those restricted for export in the ITC(HS) Classification of Export & Import items, 2002-2007, 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 a licence/certificate/permission and in accordance with customs notification issued in this behalf.

3.8

"Services" include all the 161 tradable services covered under the General Agreement on Trade in Services where payment for such services is received in free foreign exchange. A list of services is given in Appendix-36 of Handbook (Vol.1). Service exporters are required to register themselves with Federation of Indian Exporters Organisation. However, software exporter shall register themselves with Electronic and Software Export Promotion Council.

The service providers as defined in paragraph 9.47, rendering services listed in Appendix–36 shall be entitled for all the facilities mentioned in the Policy. All provisions of the Policy shall apply mutatis-mutandis to such export of services as they apply to goods.

Service provider (other than hotels) shall be entitled to duty free imports equivalent to 10% of the average foreign exchange earned by them in preceding three years. Hotels (having approval as three star or above categories by the Department of Tourism, Government of India) and other service providers in tourism sector registered with Deptt. of Tourism, Government of India shall be entitled for duty free imports equivalent to 5% of the average foreign exchange earned by them in the preceding three years subject to a minimum average foreign exchange earning of Rs.10 lakhs in the preceding three years.

Service provider (other than hotels) shall be entitled to duty free imports equivalent to 10% of the average foreign exchange earned by them in preceding three licensing years. However, hotels (one star and above), heritage hotels, stand-alone restaurants approved by Department of Tourism, Govt. of India and other service providers in tourism sector registered with Department of Tourism, Govt. of India shall be entitled for duty free imports equivalent to 5% of the average foreign exchange earned by them in preceding three licensing years. For one & two star hotels and stand- alone restaurants, the foreign exchange earned through international credit cards only shall be taken into account for the entitlement under the scheme. The duty free entitlement shall be used for import of any capital good including spares, office equipment(s) & professional equipment(s), office furniture(s) & consumables. However agriculture, dairy products, motor cars, sports utility vehicles and all purpose vehicles would not be allowed to be imported against  this entitlement .

The entitlement and the goods shall be non transferable and would be available only to those service providers, who have a total foreign exchange earning of over Rs.30 Lakhs in the preceding one/two/three licensing years.

4.1.6

Advance Licence

The facility of Advance Licence shall also be available where some of the inputs are supplied free of cost to the exporter. In such cases, for calculation of value addition, the notional value of free of cost inputs alongwith value of other duty-free inputs shall be taken into consideration. However, if all the inputs are supplied free of cost, such shall be covered under paragraph 4.2.7 of the Policy.

The facility of advance licence shall also be available where all or some of the inputs are supplied free of cost to the exporter.  In such cases, for calculation of value addition, the notional value of free of cost inputs alongwith value of other duty free inputs shall be taken into consideration.  However, if all the inputs are supplied free of cost, the applicant shall have the flexibility to opt for the provisions of paragraph 4.2.7 of the Policy. 

4.1.7A

Advance Licence for Annual Requirements

Advance licence can also be issued on the basis of annual requirement for physical exports.

Export House, Trading House, Star Trading Houses and Super Star Trading Houses shall be entitled for the Advance Licence for annual requirement. However, if the status holders are holding the certificate as merchant exporter, they are also entitled to the Advance Licence for Annual Requirement provided they agree to the endorsement of the name(s) of the supporting manufacturer(s) on the relevant licence.

The entitlement under this scheme shall be upto 200% of the FOB value of export in the preceding licensing year. Such licence shall have positive value addition.

Advance Licence can also be issued on the basis of annual requirement for physical exports, intermediate supplies or deemed exports. 

Export House, Trading House, Star Trading Houses and Super Star Trading Houses shall be entitled for Advance Licence for annual requirement.  However, if the status holders are holding the certificate as merchant exporter, they are also entitled to the Advance Licence for Annual Requirement provided they agree to the endorsement of the name(s) of the supporting manufacturer(s) on the relevant licence.

The entitlement under this scheme shall be upto 200% of the FOB/FOR value of export in the preceding licensing year.  Such licence shall have positive value addition.

4.2.3

DFRC

DFRC shall be issued only in respect of products covered under the SIONs as notified by DGFT. However, DFRC shall not be issued in respect of SIONs which are subject to "actual user" condition or where the input is allowed with prior import condition or where the norms allow import of Acetic Anhydride, Ephedrine and Pseudo Ephedrine in the Handbook (Vol-II).

However DFRC may be issued for SIONs allowing import of Acetic Anhydride, Ephedrine and Pseudo Ephedrine provided these items are specifically deleted from the list of import items.

DFRC shall be issued only in respect of products covered under the Standard Input Output Norms as notified by DGFT.  However, in respect of Standard Input Output Norms  which are subject to “actual user” condition or where the input(s) is allowed with prior import condition or for import of fuel under the general norms, DFRC shall be issued with actual user condition for these inputs. 

In cases where Standard Input Output Norms allow import of Acetic Anhydride, Ephedrine and Pseudo Ephedrine , DFRC shall be issued provided these items are specifically deleted from the list of import items.

4.2.4

DFRC

DFRC shall be issued for import of inputs as per SION as indicated in the shipping bills. The validity of such licences shall be 18 months. DFRC and or the material(s) imported against it shall be freely transferable.

DFRC shall be issued for import of inputs as per SION as indicated in the shipping bills.  The validity of such licences shall be 18 months.  DFRC and or the material(s) imported against it shall be freely transferable. However, DFRC with actual user condition or the material(s) imported against it shall not be transferable.

4.2.7

Jobbing, Repairing etc. for re-export

Import of goods, including those mentioned as restricted in ITC(HS) but excluding prohibited items, in terms of paragraph 4.1.1 supplied free of cost, may be permitted for the purpose of jobbing without a licence/certificate/ permission as per the terms of notification issued by Department of Revenue from time to time.

Similarly import of goods for carrying out repairs, re-conditioning, re-engineering, testing etc. shall be allowed as per the terms and conditions of the Customs notification even though the goods may be restricted for imports under the Exim Policy/ITC(HS) Classification of Imports and Exports Book.

Import of goods, including those mentioned as restricted in ITC(HS) but excluding prohibited items, supplied free of cost, may be permitted for the purpose of jobbing without a licence/certificate/ permission as per the terms of notification issued by Department of Revenue from time to time.

Similarly, import of goods for carrying out repairs, re-conditioning, re-engineering, testing etc. shall be allowed as per the terms and conditions of the Customs notification even though the goods may be restricted for imports under the Exim Policy/ITC(HS) Classification of Imports and Exports Book.

4.3.5

Applicability of Drawback

Normally, the exports made under the DEPB Scheme shall not be entitled for drawback. However, the additional customs duty/excise duty paid in cash on inputs under DEPB shall be adjusted as CENVAT Credit or Duty Drawback as per rules framed by the Department of Revenue. In cases, where the additional customs duty is adjusted from DEPB, no benefit of CENVAT/ Drawback shall be admissible.

Para highlighted in bold is Deleted

5.1

EPCG Scheme

The scheme allows import of capital goods for pre production, production and post production (including CKD/SKD thereof as well as computer software systems) at 5% Customs duty subject to an export obligation equivalent to 8 times of duty saved on capital goods imported under EPCG scheme to be fulfilled over a period of 8 years reckoned from the date of issuance of licence.

However, in respect of EPCG licences with a duty saved value of Rs.100 crore or more, the same export obligation shall be required to be fulfilled over a period of 12 years.

Spare  refractories, catalyst and consumable for the existing plant and machinery may also be imported under the EPCG scheme . However, import of motor cars, sports utility vehicles/ all purpose vehicles shall be allowed only to hotels, travel agents, tour operators or tour transport operators whose foreign exchange earning in current licencing year or preceding 1/2/3 licencing years is Rs 1.5 crores.

5.1A

EPCG Scheme

Spares for the existing plant and machinery may also be imported under the EPCG scheme subject to an export obligation equivalent to 8 times of duty saved to be fulfilled over a period of 8 years reckoned from the date of issuance of licence.

Spares, spare refractories, catalyst & consumable for the existing plant and machinery may also be imported under the EPCG Scheme subject to an export obligation equivalent to 8 times of duty saved to be fulfilled over a period of 8 years reckoned from the date of issuance of licence.

5.4(i)

Export Obligation

The following conditions shall apply to the fulfilment of the export obligation:-

(i) The export obligation shall be fulfilled by the export of goods capable of being manufactured or produced by the use of the capital goods imported under the scheme. The export obligation may also be fulfilled by the export of same goods, for which EPCG licence has been obtained, manufactured or produced in different manufacturing units of the licence holder/specified supporting manufacturer (s)/ vendor(s). The export obligation under the scheme shall be, over and above, the average level of exports achieved by him in the preceding three licensing years for same and similar products except for categories mentioned in Handbook (Vol.1). Alternatively, export obligation may also be fulfilled by exports of other goods manufactured or service provided by the same firm/company which has the EPCG licence. However, in such cases, the additional export obligation imposed under EPCG scheme shall be over and above the average exports achieved by the unit in preceding three years for the substitute products/services. This facility shall only be available to manufacturer exporters/ service provider.

(ii) The export obligation under the scheme shall be, in addition to any other export obligation undertaken by the importer, except the export obligation for the same product under Advance Licence, DFRC, DEPB or Drawback scheme.

(i)The export obligation shall be fulfilled by the export of goods capable of being manufactured or produced by the use of the capital goods imported under the scheme. The export obligation may also be fulfilled by the export of same goods, for which EPCG licence has been obtained, manufactured or produced in different manufacturing units of the licence holder/specified supporting manufacturer (s)/ vendor(s). The export obligation under the scheme shall be, over and above, the average level of exports achieved by him in the preceding three licensing years for same and similar products except for categories mentioned in Handbook (Vol.1). Alternatively, export obligation may also be fulfilled by exports of other goods manufactured or service provided by the same firm/company or group company which has the EPCG licence. However, in such cases, the additional export obligation imposed under EPCG scheme shall be over and above the average exports achieved by the unit/company/group company in preceding three years for the substitute products/services.

The licencee can also opt for the re-fixation of the balance export obligation based on the 8 times of the duty saved amount for the CIF value in proportion to the balance Export obligation under the scheme.

The aforesaid facilities shall only be available to manufacturer exporters/ service provider on all the licences where export obligation period including extended export obligation period valid on the date of application . In this regard, exports made only on or after submission of application for alternate item and/ or re-fixation of the export obligation based on duty saved amount will be taken into account for fulfillment of export obligation.

6.6(a)

Letter of Permission/ Letter of Intent and Legal Undertaking

On approval, a Letter of Permission (LOP)/Letter of Intent (LOI) shall be issued by the Development Commissioner to EOU/EHTP/STP unit. The LOP shall have an initial validity of 3 years for commencement of production. Its validity may be extended by another 3 years, beyond initial validity, by the competent authority. However proposals approved prior to 1.4.2002 shall be considered on case to case basis by the BOA.

On approval, a Letter of Permission (LOP)/Letter of Intent (LOI) shall be issued by the Development Commissioner to EOU/EHTP/STP unit. The LOP shall have an initial validity of 3 years for commencement of production. Its validity may be extended by another 3 years, beyond initial validity, by the competent authority. However proposals approved prior to 1.4.2002 shall be considered on case to case  basis by the BOA beyond six years. Standard Format for LOP extension is given in Appendix 14-IMM.

6.7(a)

Application and Approvals

Applications for setting up of units under EOU scheme other than proposals for setting up of unit in the services sector (except software and IT enabled services, or any other service activity as may be delegated by the BOA), shall be approved or rejected by the Units Approval Committee within 15 days as per the criteria indicated in Appendix 14-I of Handbook (Vol-I)

Applications for setting up of units under EOU scheme other than proposals for setting up of unit in the services sector (except R&D, software and IT enabled services, or any other service activity as may be delegated by the BOA), shall be approved or rejected by the Units Approval Committee within 15 days as per the criteria indicated in Appendix 14-I of Handbook (Vol-I).

7.7(a)

Approvals and Applications

Applications for setting up a unit in SEZ other than proposals for setting up of unit in the services sector (except software and IT enabled services, trading or any other service activity as may be delegated by the BOA), shall be approved or rejected by the Units Approval Committee within 15 days as per procedure indicated in Annexure to Appendix 14-II of Handbook (Vol-I) . In other cases approval may be granted by the Board of Approval.

Applications for setting up a unit in SEZ other than proposals for setting up of unit in the services sector (except R&D, software and IT enabled services, trading or any other service activity as may be delegated by the BOA), shall be approved or rejected by the Units Approval Committee within 15 days as per procedure indicated in Annexure to Appendix 14-II of Handbook (Vol-I) . In other cases approval may be granted by the Board of Approval.

7.11 (a)

Inter-unit Transfer

(a) SEZ units may transfer manufactured goods, including partly processed/semi-finished goods and services from one SEZ unit to another SEZ/EOU/ EHTP/STP unit.

“SEZ units may transfer manufactured goods, including partly processed/semi-finished goods and services from one SEZ unit to another SEZ/EOU/EHTP/STP unit.  However, trading units in SEZ may sell/transfer goods imported/procured from DTA to another SEZ/EOU/EHTP/STP unit.”

8.2 (f)

Categories of Supply

Supply of goods to any project or purpose in respect of which the Ministry of Finance, by a notification, permits the import of such goods at zero customs duty coupled with the extension of benefits under this chapter to domestic supplies;

Supply of goods to any project or purpose in respect of which the Ministry of Finance, by a notification, permits the import of such goods at zero customs duty.

9.47(iv)

Supply of a ‘service’ in India relating to exports paid in free foreign exchange.

Supply of a ‘service’ in India relating to exports paid in free foreign exchange or in Indian Rupees, which are otherwise considered as having been paid for in free foreign exchange by RBI.