PRESENTATION ON

EXIM POLICY 2002 - 2007

BACKGROUND

EXIM Policy (2002 – 07)

Export – Import Policy

Announced on 1.4.2002

Focuses on 220 identified commodities

25 potential markets for exports.

Enables duty free imports with a committed exports obligation.

Norms fixed by the Central Government

SION ( Standard Input – Output Norms.

Adhoc basis ( where SION is not published)

EXIM Policy covers -

Duty Exemption Scheme ( DES )

Duty Exemption Pass Book ( DEPB)

Duty Free Replenishment Certificate (DFRC )

Export Promotion Capital Goods (EPCG)

Deemed Exports

Export Oriented Units (EOUs) / Special Economic Zone (SEZ)

AMENDMENTS IN EXIM POLICY ( FEB. 2004)

Duty Exemption Scheme

Duty free Fuel can be imported with actual user condition under DFRC

Advance License for intermediate supplies under DFRC scheme.

Advance license for annual requirements extended for Deemed Exports.

Deemed Exports

Deemed export facility extended to Fertilizers and Refinery projects.

Fixation of drawback rate decentralized & delegated to DGFT Regional Offices.

Duty Exemption / Remission Scheme

Enables duty free import of inputs required for export production.

Advance Licence is issued under Duty Exemption Scheme.

Enables Post-Export Replenishment / Remission of duty on inputs used in the export product.

Duty Remission Scheme - DFRC DEPB

DFRC : Permits free imports – Transferable in Nature.

DEPB : allows drawback of import charges on inputs used in the export product

Advance Licence

Issued for:- Physical exports

Intermediate supplies

Deemed exports

Advance Licence & Materials imported thereunder – Not Transferable.

Advance Licence issued : annual requirements of exports .

Advance Licence for annual requirement : EH/TH, STH, SSTH

Entitlement upto 200% of the FOB value of export in the preceding license years.

Allows duty free imports of inputs (fuel oil)

For the EOUs / EUs.

Requirements can be procured Indigenously under Deemed Export Scheme

Advance Intermediate Licence

Documents required from customer .

Copy of PO/ LOI, or offer letter duly accepted by the customer.

One copy of each invoice - stamped & signed by customer with remark ‘ received material’

All invoices - counter signed by the Jurisdictional Excise Authorities

Consent letter from the customer Bill no., Date, Cheque no., amount, name of bank

Payment certificate as per appendix 22A

Advance Intermediate LicenceProcedure for supply of materials

Supplier executes a contract to supply to the AL holder – Raw material, Quantity, Value as given in the Advance Licence.

Will apply for IALs

Gives the name of J-DGFT with whom he is registering.

Buyer forwards his AL with suppliers contract to his J-DGFT For invalidate the item for import in the Licence

J- DGFT to issue a letter confirming the invalidation letter to buyer, cc to supplier, cc to J-DGFT, supplier.

PROCEDURE FOR SUPPLIES UNDER ADVANCE LICENCE

Supplier

CustomerForeign Customer

place an order ( 1 )

DGFT issue File No.(3)

Supplier JDGFT

Supplier can import duty free

Raw Materials (5)

Supplier applies for AL (2)

Licence issued subsequently

(4)

On completion of EO, submit

appln. for redemption (6)

JDGFT issues RC (7)

PROCEDURE FOR SUPPLIES UNDER DEEMED EXPORTS

Supplier

AL Holder

AL Holder JDGFT

Offer of Product to the Customer ( 1 )

Along with offer & AL submit for invalidation (2)Issue IL to AL

holder , CC to Supplier and

CC to Supplier JDGFT ( 3)

Supplier JDGFT

copy of IL & AL(4)

Apply for AIL to obtain File

No. (5)

Commence supplies

(6)

Advance Intermediate LicenceProcedure for supply of materials

Supplier to apply with it’s J –DGFT for IAL , after receipt of invalidation letter along with copy of AL of the supplier

Supplier upon receipt of File No. by J-DGFT intimate to Refinery for supplying the material to the customer

File No. issued by J-DGFT to be mentioned on all invoices before issue.

Advance Intermediate LicenseClosure of the file

Procedures at Supplier end -

Supplier to submit various documents viz. Invoice, BRC,etc. to J -DGFT for closure of file.

J-DGFT will issue Discharge Certificate of having fulfilled the export obligation

Discharge Certificate to be produced to Customs with copies of documents, for cancellation of legal undertaking

Deemed Exports

EXIM POLICY 2002-2007 – under Chapter 8

Definition Goods supplied do not leave the country payment for such supplies is received in Indian rupees.

Categories ( Provided goods mgfd. in India):

Supply of goods Against Licence / AL for annual requirement / DFRC.

Supply to 100% EOU / SEZ/ STPs / EHTPs & EPCG holders

Includes

Advance Release Order (ARO)

Back to Back LC

ARO & B2B LC

Advance Release Order (ARO)

Sourcing of inputs from indigenous source, procure thru ARO

ARO against DFRC is transferable.

Back to Back LC ( B2B LC)

This is an alternative to ARO.

Admissibility

Duty drawback is allowed at 8 % of FOB.

Either imported of indigenously procured.

Benefits to HPCL Entitled to IAL. Refund of Terminal Excise Duty / Duty Drawback, as applicable.

DEPB

Duty Entitlement Pass Book

Background To neutralize the incidence of custom duty on the import

content of the export products.

Validity of DEPB is 12 months.

No revalidation possible.

Holder of DEPB shall have the option to pay additional custom duty if any, in cash as well.

EXPORT PROMOTION CAPITAL GOODS SCHEME ( EPCG)

Scheme Allows import of capital goods for pre – production / post

production. 5 % custom duty on capital goods

Conditions Export obligation equivalent to 8 times of duty saved.

Time period - 8 years from the date of issue of licence.

CIF value of Rs. 100 crores or more - 12 yrs instead of 8 yrs.

Import of 2nd hand capital goods upto 10 years old allowed.

EPCG licence holder may source the capital goods from a domestic manufacturer.

Export obligation short fall upto 5% /10% excess is allowed.

THE STANDARD INPUT/OUTPUT NORMS UPTO 31.3.03

Sr. No. Oty

A- 2687 Hydrocarbons viz. Propane, Propylene, I MT 1) Crude Oil - 1.564 MTC3/C4 Butane, Byeylene, (various grades), 2) Relevant catalysts limited to

Liquefied Petroleum Gas (LPG- various 1% of FOB value.grades) and Mixtures thereof.

A- 2688 Light Ends (LE) viz. Naphtha Motor Spirit 1MT 1) Crude Oil - 1.265 MT(Gasoline), Solvents, Retomate, Hexane, TAME excluding C3/C4 Hydrocarbons and mixture thereof

A-2689 Middle Distillates (MD) viz. ATF, SKO, HSD 1 MT 1) Crude Oil- 1.072 MT(3-4 grades), MTO, LABFS, AROMEX, JBOLDO, Gas Oils Solvents (2-3 grades)

A-2690 Heavy Ends (HE), viz. FO (2-3 grades), 1 MT 1) Crude Oil - 0.820 MTLSHS (2-3 grades), HPL Pitch Asphalt (3-4 grades), Petroleum Bitumen (3-4 grades), RAW Petroleum Coke and Calcined Petroleum Coke.

Resultant Products Inputs

VALIDITY OF AL/ IAL

  SION is fixed (for Petroleum Products SION is fixed) :

An application as per Appendix 10- b along with prescribed documents to J-DGFT.

Normally the validity period of the licence is 18 months from the date of issue

Regional Licensing Authority may consider one revalidation for a period of 6 months & further revalidation of 6 months possible.

REGULARISATION OF BONAFIDE DEFAULT

Export Obligation (EO) fulfilled in value, shortfall in terms of quantity

Licence holder pay to the custom authority

1. For custom duty on the unutilized value of the imports & Int.

2. 3% of CIF value of unutilized imported material thereon.

EO fulfilled in Qty., shortfall in value.

1. No penalty, if the licence holder achieves the positive VA.

EO not fulfilled in Qty. and Value.

1. Both penalty will apply

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