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Chapter - 4 Duty Exemption & Remission Schemes.


CHAPTER 4

DUTY EXEMPTION / REMISSION SCHEMES

4.00 Objective

Schemes under this Chapter enable duty free import of inputs for export production, including replenishment of input or duty remission.

4.01 Schemes

(a) Duty Exemption Schemes.

The Duty Exemption schemes consist of the following: (i)AdvanceAuthorisation(AA)(whichwill include Advance Authorisation forAnnual Requirement).

(ii) Duty Free Import Authorisation (DFIA). (b)Duty Remission Scheme.

Duty Drawback (DBK) Scheme, administered by Department of Revenue.

4.02 Applicability of Policy & Procedures

Authorisation under this Chapter shall be issued in accordance with the Policy and Procedures in force on the date of issue of the Authorisation.

4.03 Advance Authorisation

(a) Advance Authorisation is issued to allow duty free import of input, which is physically incorporated in export product (making normal allowance for wastage). In addition, fuel, oil, catalyst which is consumed / utilised in the process of production of export product, may also be allowed.
(b)Advance Authorisation is issued for inputs in relation to resultant product, on the following basis:
(i) As per Standard Input Output Norms (SION)notified (available in Hand Book of Procedures); OR
(ii)On the basis of self declaration as per paragraph

4.07 of Handbook of Procedures.

4.04 Advance Authorisation for Spices

Duty free import of spices covered under Chapter-9 ofITC (HS) shall be permitted only for activities like crushing/ grinding / sterilization / manufacture of oils o r oleoresins. Authorisation shall not be available for simply cleaning, grading, re-packing etc.

4.05 Eligible Applicant / Export / Supply

(a) Advance Authorisation can be issued either to a manufacturer exporter or merchant exporter tied to supporting manufacturer.

(b) Advance Authorisation for pharmaceutical products manufactured through Non-Infringing (NI) process (as indicated in paragraph 4.18 of Handbook of Procedures) shall be issued to manufacturer exporter only.

(c)Advance Authorisation shall be issued for:

(i) Physical export (including export to SEZ); (ii)Intermediate supply; and/or
(iii) Supply of goods to the categories mentioned in paragraph 7.02 (b), (c), (e), (f), (g) and (h) of this FTP.
(iv) Supply of ‘stores’ on board of foreign going vessel/ aircraft, subject to condition that there is specific Standard Input Output Norms in respectof item supplied.

4.06 Advance Authorisation for Annual Requirement

(i) Advance Authorisation for Annual Requirement shall only be issued for items notified in Standard Input Output Norms (SION), and it shall not be available in case of adhoc norms under paragraph 4.03 (b)(ii) of FTP.
(ii)Advance Authorisation for Annual Requirement shall also not be available in respect of SION where any item of input appears in Appendix 4-J.

4.07 Eligibility Condition to obtain Advance Authorisation for Annual Requirement

(i) Exporters having past export performance (in at least preceding two financial years) shall be entitled for Advance Authorisation for Annual requirement.
(ii)Entitlement in terms of CIF value of imports shall be upto 300% of the FOB value of physical export and / or FOR value of deemed export in preceding financial year or Rs 1 crore, whichever is higher.

4.08 Value Addition

Value Addition for the purpose of this Chapter (except for Gems and Jewellery sector for which value addition is prescribed in paragraph 4.38 of FTP) shall be:-

A - B
VA =        ----------- x 100, where
B

A = FOB value of export realized / FOR value of supply received.
B = CIF value ofinputs covered byAuthorisation, plus value of any other input used on which benefit of DBK is claimed or intended to be claimed.

4.09 Minimum Value Addition

(i) Minimum value addition required to be achieved under Advance Authorisation is 15%.
(ii)Export Products where value addition could be less than 15% are given in Appendix 4D.
(iii) For physical exports for which payments are not received in freely convertible currency, value addition shall be as specified in Appendix 4C.
(iv) Minimum value addition for Gems & Jewellery Sector is given in paragraph 4.61 of Handbook of Procedures.
(v)In case of Tea, minimum value addition shall be 50%.

4.10 Import of Mandatory Spares

Import of mandatory spares which are required to be exported/ supplied with the resultant product shall be permitted duty free to the extent of 10% of CIF value of Authorisation.

4.11 Ineligible categories of import on Self Declaration basis

(a) Import of following products shall not be permissible on self-declaration basis:

  1. All vegetable / edible oils classified under Chapter-15 and all types of oilseeds classified under Chapter-12 of ITC (HS) book;
  2. All types of cereals classified under Chapter–10 ofITC (HS) book;
  3.  All Spices other than light black pepper (light berries) having a basic customs duty of more than30%, classified under Chapter-9 and 12 of ITC(HS) book;
  4. All types of fruits/ vegetables having a duty of more than 30%, classified under Chapter-7 and Chapter-8 of ITC (HS) book;
  5. Horn, hoof and any other organ of animal; (vi) Honey;
  6.  Rough Marble Blocks/Slabs; and
  7.  Rough Granite.
  8. Vitaminsexceptforuseinpharmaceutical industry.

(b) For export of perfumes, perfumery compounds and various feed ingredients containing vitamins, no Authorisation shall be issued by Regional Authority under paragraph 4.07 of Handbook of Procedures and applicants shall be required to apply under paragraph

4.06 of Hand Book of Procedures to the Norms Committee.

(c)Where export and/or import of biotechnology items and related products are involved, Authorisation under paragraph 4.07 of Handbook of Procedures shall be issued by Regional Authority only on submission of a “No Objection Certificate” from Department of Biotechnology.

4.12 Accounting of Input

  1. Wherever SION permits use of either (a) a generic input or (b) alternative input, unless the name of the specific input [which has been used in manufacturing the export product] gets indicated / endorsed in the relevant shipping bill and these inputs, so endorsed, match the description in the relevant bill of entry, the concerned Authorisation will not be redeemed. In other words, the name/description of the input used (or to be used) in the Authorisation must match exactly with the name/description endorsed in the shipping bill.
  2. In addition, if in any SION, a single quantity has been indicated against a number of inputs (more than one input), then quantities of such inputs to be permitted for import shall be in proportion to the quantity of these inputs actually used/consumed in production, within overall quantity against such group of inputs. Proportion of these inputs actually used/consumed in production of export product shall be clearly indicated in shipping bills.
  3.  At the time of discharge of export obligation (issue ofEODC) or at the time of redemption, RegionalAuthority shall allow only those inputs which have been specifically indicated in the shipping bill.
  4. The above provisions will also be applicable for supplies to SEZs and supplies made under Deemed export. Details as given above will have to be indicated in the relevant Bill of Export, ARE-3, Central Excise certified Invoice / import document / document for domestic procurement/supply.

4.13 Pre-import condition in certain cases

  1. DGFTmay,byNotification,imposepre-import condition for inputs under this Chapter.
  2. Import items subject to pre-import condition are listed in Appendix 4-J or will be as indicated in Standard Input Output Norms (SION).
  3.  Import of drugs from unregistered sources shall have pre-import condition.

4.14 Details of Duties exempted

Imports under Advance Authorisation are exempted from paymentof Basic Customs Duty, Additional Customs Duty,Education Cess, Anti-dumping Duty, Safeguard Duty and Transition Product SpecificSafeguard Duty, wherever applicable.However, Import against supplies covered under paragraph 7.02 (c), (d) and (g) of FTP will not be exempted from payment ofapplicable Anti- dumping Duty, Safeguard Duty and Transition Product Specific Safeguard Duty, if any.

4.15 Admissibility of Drawback

Drawback as per rate determined and fixed by Central Excise authority shall be available for duty paid imported or indigenous inputs (not specified in the norms) used in the export product. For this purpose, applicant shall indicate clearly details of duty paid input in the application for Advance Authorisation. As per details mentioned in the application, Regional Authority shall also clearly endorse details of such duty paid inputs in the condition sheet of the Advance Authorisation.

4.16 Actual User Condition for Advance Authorisation

(i) Advance Authorisation and / or material imported under Advance Authorisation shall be subject to ‘Actual User’ condition.The same shall not be transferable even after completion of export obligation. However, Authorisation holder will have option to dispose of product manufactured out of duty free input once export obligation is completed.
(ii)In case where CENVAT credit facility on input has been availed for the exported goods, even after completion of export obligation, the goods imported against such Advance Authorisation shall be utilized only in the manufacture of dutiable goods whether within the same factory or outside (by a supporting manufacturer). For this, the Authorisation holder shall produce a certificate from either the jurisdictional Central Excise Authority or Chartered Accountant, at the option of the exporter, at the time of filing application for Export Obligation Discharge Certificate to Regional Authority concerned.
(iii) Waste / scrap arising out of manufacturing process, as allowed, can be disposed off on payment of applicable duty even before fulfillment of export obligation.

4.17 Validity Period for Import

  1. Validity period for import of Advance Authorisation shall be 12 months from the date of issue of Authorisation.
  2. Advance Authorisation for Deemed Export shall be co- terminus with contracted duration of project execution or 12 months from the date of issue of Authorisation, whichever is more.
4.18 Importability / Exportability of items that areProhibited/Restricted/ STE
  1. No export or import of an item shall be allowed under Advance Authorisation / DFIA if the item is prohibited for exports or imports respectively. Export of a prohibited item may be allowed under Advance Authorisation provided it is separately so notified, subject to the conditions given therein.
  2. Items reserved for imports by STEs cannot be imported against Advance Authorisation / DFIA. However those items can be procured from STEs against ARO or Invalidation letter. STEs are also allowed to sell goods on High Sea Sale basis to holders of Advance Authorisation / DFIA holder. STEs are also permitted to issue “No Objection Certificate (NOC)” for import by Advance Authorisation / DFIA holder. Authorisation Holder would be required to file Quarterly Returns of imports effected against such NOC to concerned STE and STE would submit half- yearly import figures of such imports to concernedadministrative Department for monitoring with a copy endorsed to DGFT.
  3.  Items reserved for export by STE can be exported under Advance Authorisation / DFIA only after obtaining a ‘No Objection Certificate’ from the concerned STE.
  4. Import of restricted items shall be allowed underAdvance Authorisation/ DFIA.
  5.  Export of restricted / SCOMET items however, shall be subject to all conditionalities or requirements of export authorisation or permission, as may be required, under Schedule 2 of ITC (HS).

4.19 Free of Cost Supply by Foreign Buyer

Advance Authorisation shall also be available where some or all inputs are supplied free of cost to exporter by foreign buyer. In such cases, notional value of free of cost input shall be added in the CIF value of import and FOB value of export for the purpose of computation of value addition. However, realization of export proceeds will be equivalent to an amount excluding notional value of such input.

4.20 Domestic Sourcing of Inputs

  1.  Holder of an Advance Authorisation / Duty Free Import Authorisation can procure inputs from indigenous supplier/ State Trading Enterprise in lieu of direct import. Such procurement can be against Advance Release Order (ARO),Invalidation Letter, Back-to-Back Inland Letter of Credit.
  2. When domestic supplier intends to obtain duty free material for inputs through Advance Authorisation forsupplying resultant product to another Advance Authorisation / DFIA / EPCG Authorisation, Regional Authority shall issue Invalidation Letter.
  3.  Regional Authority shall issue Advance Release Order if the domestic supplier intends to seek refund of duty through Deemed Exports mechanism as per provisions under Chapter-7 of FTP.
  4.  Regional Authority may issue Advance Release Order or Invalidation Letter at the time of issue of Authorisation simultaneously or subsequently.
  5. Advance Authorisation holder under DTA can procure inputs from EOU / EHTP / BTP / STP / SEZ units without obtaining Advance Release Order or Invalidation Letter.
  6.  Duty Free Import Authorisation holder shall also be eligible for Advance Release Order / Invalidation Letter facility.
  7. Validity of Advance Release Order / Invalidation Letter shall be co-terminous with validity of Authorisation.

4.21 Currency for Realisation of Export Proceeds

  1. Export proceeds shall be realized in freely convertible currency exceptotherwisespecified.Provisions regarding realization of export proceeds are given in paragraph 2.43 of FTP.
  2.  Export to Rupee Payment Area (RPA) (for which payments are not received in freely convertible currency) shall be subject to minimum value addition as specified in Appendix-4C.
  3.  Export to SEZ Units shall be taken into account for discharge of export obligation provided payment is realised from Foreign Currency Account of the SEZ unit.
  4.  Export to SEZ Developers / Co-developers can also be taken into account for discharge of export obligation even if payment is realised in Indian Rupees.
  5.  Authorisation holder needs to file Bill of Export for export to SEZ unit / developer / co-developer in accordance with the procedures given in SEZ Rules,2006.

4.22 Export Obligation

(i) Period for fulfilment of export obligation under Advance Authorisation shall be 18 months from the date of issue of Authorisation or as notified by DGFT.
(ii) In cases of supplies to turnkey projects in India under deemed export category or turnkey projects abroad, the Export Obligation period shall be co-terminus with contracted duration of the project execution or 18 months whichever is more.
(iii) Export Obligation for items falling in categories of defence, military store, aerospace and nuclear energy shall be 24 months from the date of issue of authorization or co-terminus with contracted duration of the export order whichever is more.

(ii) Export Obligation Period for specified inputs, from the date of clearance of each consignment, is given in Appendix 4-J.

4.23 Export Obligation Period (EOP) Extension for units under BIFR/Rehabilitation.

A company holding Advance Authorisation and registered with BIFR / Rehabilitation Department of State Government or any firm / company acquiring a unit holding Advance Authorisation which is under BIFR / Rehabilitation, may be permitted export obligation extension for the Advance Authorisation(s) held by the acquired unit, as per rehabilitation package prepared by operating agency and approved by BIFR / Rehabilitation Department of State Government. If time-period upto which EO extension is to be granted is not specifically mentioned in the BIFR order, EO extension of two years from the date of expiry of EOP (including extended period) or the date of BIFR order, whichever is later, shall be granted without payment of composition fee.

4.24 Re-import of exported goods under Duty Exemption / Remission Scheme

Goods exported under Advance Authorisation / Duty Free Import Authorisation may be re-imported in same or substantially same form subject to such conditions as may be specified by Department of Revenue. Authorisation holder shall also inform about such re-importation to the Regional Authority which had issued the Authorisation within one month from date of re-import.

DUTY FREE IMPORT AUTHORISATION SCHEME (DFIA)

4.25 DFIA Scheme

(a) Duty Free Import Authorisation is issued to allow duty free import of inputs. In addition, import of oil and catalyst which is consumed / utilised in the process of production of export product, may also be allowed.
(b) Provisions of paragraphs 4.12, 4.18, 4.20, 4.21 and 4.24 of FTP shall be applicable to DFIA also.

4.26 Duties Exempted and Admissibility of Cenvat and Drawback

  1.  Duty Free Import Authorisation shall be exempted only from payment of Basic Customs Duty.
  2. Additional customs duty/excise duty,beingnot exempt, shall be adjusted as CENVAT credit as per DoR rules.
  3. Drawback as per rate determined and fixed by Central Excise authority shall be available for duty paid inputs, whether imported or indigenous, used in the export product. However, in case such drawback is claimed for inputs not specified in SION, the applicant should have indicated clearly details of such duty paid inputs also in the application for Duty Free Import Authorization, and as per the details mentioned in the application, the Regional Authority should also have clearly endorsed details of such duty paid inputs in the condition sheet of the Duty Free Import Authorization.

4.27 Eligibility

  1.  Duty Free Import Authorisation shall be issued on post export basis for products for which Standard Input Output Norms have been notified.
  2.  Merchant Exporter shall be required to mention name and address of supporting manufacturer of the export product on the export document viz. Shipping Bill / Airway Bill / Bill of Export / ARE-1 / ARE-3.
  3. Application is to be filed with concerned Regional Authority before effecting export under Duty Free Import Authorisation.

4.28 Minimum Value Addition

Minimum value addition of 20% shall be required to be achieved. For items where higher value addition has been prescribed under Advance Authorisation in Appendix 4C, the same value addition shall be applicable for Duty Free Import Authorisation also.

4.29 Validity & Transferability of DFIA

  1. Applicant shall file online application to Regional Authority concerned before starting export under DFIA.
  2.  Export shall be completed within 12 months from the date of online filing of application and generation of file number.
  3.  While doing export/supply, applicant shall indicate file number on the export documents viz. Shipping Bill / Airway Bill/ Bill of Export / ARE-1 / ARE-3, Central Excise certified Invoice.
  4.  Aftercompletionofexportsandrealizationof proceeds, request for issuance of transferable Duty Free Import Authorisation may be made to concerned Regional Authority within a period of twelve months from the date of export or six months (or additional time allowed by RBI for realization) from the date of realization of export proceeds, whichever is later.
  5. Applicant shall be allowed to file application beyond 24 months from the date of generation of file number as per paragraph 9.03 of Hand Book of Procedures.
  6.  Separate DFIA shall be issued for each SION and each port.
  7.  Exports under DFIA shall be made from from a single port as mentioned in paragraph 4.37 of Handbook of Procedures.
  8.  No Duty Free Import Authorisation shall be issued for an export product where SION prescribes ‘Actual User’ condition for any input.
  9. Regional Authority shall issue transferable DFIA with a validity of 12 months from the date of issue. No further revalidation shall be granted by Regional Authority.

4.30 Sensitive Items under Duty Free Import Authorisation

(a) In respect of resultant products requiring following inputs, exporter shall be required to provide declaration with regard to technical characteristics, quality and specification in Shipping Bill:
“Alloy steel including Stainless Steel, Copper Alloy, Synthetic Rubber, Bearings, Solvent, Perfumes / Essential Oil/ Aromatic Chemicals, Surfactants, Relevant Fabrics, marble, Articles made of polypropylene, Articles made of Paper and Paper Board, Insecticides, Lead Ingots, Zinc Ingots, Citric Acid, Relevant Glass fibre reinforcement (Glass fibre, Chopped / Stranded Mat, Roving Woven Surfacing Mat), RelevantSyntheticResin (unsaturatedpolyesterresin, Epoxy Resin, Vinyl Ester Resin, Hydroxy Ethyl Cellulose), Lining Material”.
(b) WhileissuingDutyFreeImportAuthorisation, Regional Authorityshall mention technical characteristics, quality and specification in respect of above inputs in the Authorisation.

SCHEMES FOR EXPORTERS OF GEMS AND JEWELLERY

4.31 Import of Input

Exporters of gems and Jewellery can import / procure duty free input for manufacture of export product.

4.32 Items of Export

Following items, if exported, would be eligible:

  1.  Gold jewellery, including partly processed jewellery and articlesincludingmedallionsandcoins (excluding legal tender coins), whether plain or studded, containing gold of 8 carats and above;
  2.  Silver jewellery including partly processed jewellery, silverware, silver strips and articles including medallions and coins (excluding legal tender coins and any engineering goods) containing more than 50% silver by weight;
  3.  Platinum jewellery including partly processed jewellery and articles including medallions and coins (excluding legal tender coins and any engineering goods) containing more than 50% platinum by weight.

4.33 Schemes

The schemes are as follows:

  1.  Advance Procurement / Replenishment of Precious
    Metals from Nominated Agencies;
  2. Replenishment Authorisation for Gems;
  3.  Replenishment Authorisation for Consumables; (iv) Advance Authorisation for Precious Metals.

4.34 Advance Procurement/ Replenishment of Precious Metals from Nominated Agencies

(i) Exporter of gold / silver / platinum jewellery and articles thereof including mountings and findings may obtain gold / silver / platinum as an input for export product from Nominated Agency, in advance or as replenishment after export in accordance with the procedure specified in this behalf.
(ii)The export would be subject to wastage norms and minimum value addition as prescribed in paragraph

4.60 and 4.61 respectively in the Handbook of Procedures.

4.35 Replenishment Authorisation for Gems

  1.  Exporter may obtain Replenishment Authorisation for Gems from Regional Authority in accordance with procedure specified in Handbook of Procedures.
  2. Replenishment Authorisation for Gems may be issued against export including that made against supply by Nominated Agency (paragraph 4.41 of FTP) and against supply by foreign buyer (paragraph 4.45 of FTP).
  3.  In case of plain or studded gold / silver / platinum jewellery and articles, value of such Authorisation shall be determined with reference to realisation in excess of prescribed minimum value addition. Replenishment Authorisation for Gems shall be freely transferable.
  4. Replenishment Rate and item of import will be as prescribed in Appendix 4G.

4.36 Replenishment Authorisation for Consumables

(i) Replenishment authorization for duty free import of Consumables, Tools and other items namely, Tags and labels, Security censor on card, Staple wire, Poly bag (as notified by Customs) for Jewellery made out of precious metals (other than Gold & Platinum) equal to2% and for Cut and Polished Diamonds and Jewellery made out of Gold and Platinum equal to 1% of FOB value of exports of the preceding year, may be issued on production of Chartered Accountant Certificate indicating the export performance. However, in case of Rhodium finished Silver jewellery, entitlement will be3% of FOB value of exports of such jewellery. This Authorisation shall be non-transferable and subject to actual user condition.
(ii) Application for import of consumables as given above shall be filed online to the concerned Regional Authority in ANF 4H.

4.37 Advance Authorisation for Precious Metals.

(a) Advance Authorisation shall be granted on pre- import basis with ‘Actual User’ condition for duty free import of:

  1.  Gold of fineness not less than 0.995 and mountings, sockets, frames and findings of 8 carats and above;
  2.  Silver of fineness not less than 0.995 and mountings, sockets, frames and findings containing more than 50% silver by weight;
  3.  Platinum of fineness not less than 0.900 and mountings, sockets, frames and findings containing more than 50% platinum by weight.

(b) Advance Authorization shall carry an export obligation which shall be fulfilled as per procedure indicated in Chapter 4 of Handbook of Procedures.
(c)Value Addition shall be as per paragraph 4.38 of FTPand 4.61 of Handbook of Procedures.

4.38 Value Addition

Minimum Value Addition norms for gems and jewellery sector are given in paragraph 4.61 of Handbook of Procedures. It would be calculated as under:
A - B
           VA =  ----------- x 100, where
B

A = FOB value of the export realised / FOR value of supply received.
B = Value of inputs (including domestically procured) such as gold / silver / platinum content in export product plus admissible wastage along with value of other items such as gemstone etc. Wherever gold has been obtained on loanbasis,valueshall alsoinclude interest paidinfree foreign exchange to foreign supplier.

4.39 Wastage Norms

Wastage or manufacturing loss for gold / silver / platinum jewellery shall be admissible as per paragraph 4.60 of Handbook of Procedures.

4.40 DFIA not available

Duty Free Import Authorisation scheme shall not be available for Gems and Jewellery sector.

4.41 Nominated Agencies

  1. Exporters may obtain gold / silver / platinum from Nominated Agency. Exporter in EOU and units in SEZ would be governed by the respective provisions of Chapter-6 of FTP / SEZ Rules, respectively.
  2.  Nominated Agencies are MMTC Ltd, The Handicraft and Handlooms Exports Corporation of India Ltd, The State Trading Corporation of India Ltd, PEC Ltd, STCL Ltd, MSTC Ltd, and Diamond India Limited
  3. Four Star Export House from Gems & Jewellery sector and Five Star Export House from any sector may be recognized as Nominated Agency by Regional Authority.
    Reserve Bank of India can authorize any bank asNominated Agency.
  4.  Procedure for import of precious metal by Nominated
    Agency (other than those authorized by Reserve Bankof India and the Gems & Jewellery units operating under EOU and SEZ schemes) and the monitoring mechanism thereof shall be as per the provisions laid down in Hand Book of Procedures.
  5.  A bank authorised by Reserve Bank of India is allowed export of gold scrap for refining and import standard gold bars as per Reserve Bank of India guidelines.

4.42 Import of Diamonds for Certification / Grading & Re- export

Following agencies are permitted to import diamonds to their laboratories withoutanyimportduty,for the purpose of certification / grading reports, with a condition that the same should be re-exported with the certification/grading reports, as per the procedure laid down in Hand Book of Procedures:

(1) Gemological Institute of America (GIA), Mumbai, Maharashtra.
(2)Indian Diamond Institute, Surat, Gujarat, India.
(3)International Institute of Diamond Grading & Research

India Pvt Ltd., Surat, Gujarat, India.

4.43 Export of Cut & Polished Diamonds forCertification/ Grading & Re-import

List of authorized laboratories for certification / grading of diamonds of 0.25 carat and above are given in paragraph 4.74 of Handbook of Procedures.

4.44 Export of Cut & Polished Diamonds with Re-importFacility at Zero Duty

An exporter (with annual export turnover of Rs 5 crores for each of the last three years) may export cut & polisheddiamonds (each of 0.25 carat or above) to any of the agencies/laboratories mentioned under paragraph 4.74 of Handbook of Procedures with re-import facility at zero duty within 3 months from the date of export. Such facility of re-import at zero duty will be subject to guidelines issued by Central Board of Customs & Excise, Department of Revenue.

4.45 Export against Supply by Foreign Buyer

  1. Where export orders are placed on nominated agencies / status holder / exporters of three years standing having an annual average turnover of Rupees five crores during preceding three financial years, foreign buyer may supply in advance and free of charge, gold / silver / platinum, alloys, findings and mountings of gold / silver / platinum for manufacture and export.
  2.  Such supplies can also be in advance and may involve semi-finished jewellery including findings / mountings/ components for repairs / re-make and export subject
    to minimum value addition as prescribed under paragraph 4.61 of Handbook of Procedures. In such cases of export, wastage norms as per paragraph 4.60 of Handbook of Procedures shall apply.
  3.  Exportsmaybemadebynominatedagencies directly or through their associates or by status holder / exporter. Import and Export of findings shall be on net to net basis.

4.46 Export Promotion Tours/ Export of Branded Jewellery

  1. NominatedAgenciesandtheirassociates,with approval of Department of Commerce and withapproval of Gem & Jewellery Export Promotion Council (GJEPC), may export gold / silver / platinum jewellery and articles thereof for exhibitions abroad.
  2. Personal carriage of gold / silver / platinum jewellery, precious, semi-precious stones, beads and articles and export of branded jewellery is also permitted, subject to conditions as in Handbook of Procedures.

4.47 Personal Carriage of Export / Import Parcels

Personal carriage of gems and jewellery export parcels by foreign bound passengers and import parcels by an Indian importer/foreign national may be permitted as per the Handbook of Procedures.

4.48 Export by Post

Export o f jewellery through Foreign Post Office including via Speed Post is allowed. The jewellery parcel shall not exceed 20 kgs by weight.

4.49 Private / Public Bonded Warehouse

Private / Public Bonded Warehouses may be set up in SEZ/DTA for import and re-export of cut and polished diamonds, cut and polished coloured gemstones, uncut & unset precious & semi-precious stones, subject to achievement of minimum value addition of 5% by DTA units.

4.50 Diamond & Jewellery Dollar Accounts

(a) Firms and companies dealing in purchase / sale of rough or cut and polished diamonds / precious metal jewellery plain, minakari and / or studded with / without diamond and / or other stones with a track record of at least two years in import or export ofdiamonds / coloured gemstones / diamond and coloured gemstones studded jewellery / plain gold jewellery and having an average annual turnover of Rs.3 crore or above during preceding three licensing years may also carry out their business through designated Diamond Dollar Accounts (DDA).
(b)Dollars in such accounts available from bank finance and / or export proceeds shall be used only for:

  1. Import / purchase of rough diamonds from overseas/ local sources;
  2.  Purchaseof cut and polished diamonds, coloured gemstones and plain gold jewellery from local sources;
  3.  Import / purchase of gold from overseas / nominated agencies and repayment of dollar loans from the bank; and
  4. Transfer to Rupee Account of exporter.

Details of this DDA Scheme are given in Handbook of Procedures.

(c) A non DDA holder is also permitted to supply cut and polished diamonds to DDA holder, receive payment in dollars and convert the same into Rupees within 7 days. Cut and polished diamonds and coloured gemstones so supplied by non-DDA holder will also be counted towards discharge of his export obligation and/ or entitle him to replenishment Authorisation.

4.51 Export of cut & polished precious and semi- precious stones for treatment and re-import

Gems and Jewellery exporters shall be allowed to export cut and polished precious and semi-precious stones for the treatment and re-import as per customs rules and regulations. In case of re-export, the exporter shall be entitled for duty drawback as per rules.

4.52 Re-import of rejected Jewellery

Gems & Jewellery exporters shall be allowed to re-import rejected precious metal jewellery as per paragraph 4.91 of Handbook of Procedures.

4.53 Export and import on consignment basis

Gems & Jewellery exporters shall be allowed to export and import diamond, gemstones & jewellery on consignment basis as per Handbook of Procedures and Customs Rules and Regulations.


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