PUBLIC NOTICE NO. 45/2005, DT. 31/08/2005

SECTOR SPECIFIC REQUIREMENTS FOR EOU/SEZ UNITS - HIGH GRADE IRON ORE

In exercise of powers conferred under Paragraph 2.4 of the Foreign Trade Policy 2004-2009, the Director General of Foreign Trade hereby makes the following amendments in the Handbook of Procedures (Vol. I):

1. Paragraph (2) of Appendix 14-I-C shall be amended as under:-

“HIGH GRADE IRON ORE

Proposals for export of High Grade Iron Ore i.e. 64% Fe and above, except Iron ore of Goa Origin and Redi origin are presently canalized through MMTC and its exports would be subject to approval of the BOA”

2. After Paragraph 8 in Appendix 14-I-C, the following shall be added:

“9 Segregation Activities:

Segregation Activities are not covered under the definition of “Manufacture” w.e.f. 1.4.2002. This activity will, however be allowed to continue in respect of units set up prior to 1.4.2002 for a period of 5 years from the date of commencement of commercial production. The necessary inputs would also be allowed with exemption benefits as per the existing policy. However, the facility of DTA sale under para 6.8 or 6.9 of Foreign Trade Policy shall not be allowed.”

3. After Sub- para 3 (ii) of Appendix 14-I-G , the following shall be added :-

“(iii) For failure to achieve positive NFE during the course of 5 years after completion of one year from the date of commencement of commercial production, a ‘cautionary letter’ may be issued.”

4. At the end of Sub-paragraph I (e) of Appendix 14-I-H , the following shall be added :-

“ DTA sale in terms of para 6.8(a) of Policy shall be allowed only after adjustment of Advance DTA Sale Permission granted .”

5. Sub-paragraph I (g) of Appendix 14-I-H shall be amended as under:-

“(g) Advance DTA sales permission would also be admissible in cases of capacity expansion/product diversification. In such cases, the unit would be entitled to advance DTA sales linked to the exports envisaged from the expansion or new production streams or through product diversification. However, no advance DTA sale would be admissible to a DTA unit converted into an EOU except in respect of new production stream as a result of change of technology or on account of its expanded capacity for export.”

6. Sub-paragraph I (h) of Appendix 14-I-H shall be amended as under:-

“The DTA sale entitlement would accrue only if the unit has achieved positive NFE on cumulative basis. In case, a unit has not achieved positive NFE in a particular year and thus becomes ineligible for DTA sale permission, the NFE and DTA entitlement in the subsequent year(s) within a block of 5 years is to be seen with reference to cumulative value of imports and exports of earlier year(s). This will however not alter the period allowed for adjustment of Advance DTA Sale.”

This issues in Public interest.

(K.T.Chacko)
Director General of Foreign Trade and
Ex Officio Additional Secretary to the Government of India

(Issued from F .No. 01/92/180/207/AM’05/PC-II)

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