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Government of India
Ministry of Commerce & Industry
Department of Commerce
Directorate General of Foreign Trade
Udyog Bhavan, New Delhi.
Policy Circular No. 51(RE-2010)/2009-14
Dated the 28th December, 2011
To
All Customs Authorities / All Regional Authorities / Members of Trade.
Subject:- Clarification regarding registration of
contracts of cotton and cotton yarn with DGFT.
Through
Notification No. 40 (RE-2010)/2009-14 dated 31.03.2011, export of
cotton yarn was made “Free” subject to registration of export contracts with
DGFT, for ITC(HS) Code 5205, 5206 & 5207. Procedure for registration of
contracts of cotton yarn was notified through Policy Circular No. 27 of
01.04.2011. Thereafter, Trade Notice No. 19 dated 30.08.2011 stipulating
procedure for imposition of penalty for failure to export cotton yarn in terms
of Policy Circular No. 27 was issued.
2.
Notification No. 62 (RE-2010)/2009-14 dated 02.08.2011, removed the cap on
export of cotton for the remaining part of cotton year 2010-11
(October-September) and export of cotton (HS codes-5201 & 5203) was made “Free”
subject to registration of export contracts with DGFT. Procedure for
registration of contracts of cotton was notified through
Notification No. 63 of
04.08.2011. This procedure continues for the current cotton year w.e.f.
01.10.2011 except that the performance guarantee is no longer required in terms
of
Notification No. 74 (RE-2010)/2009-14 dated 12.09.2011.
3. Many representations have been received from RAs and exporters seeking
clarification about revalidation, cancellation or partial modifications of RCs
as well as about imposition of penalty in case of failure to export full
quantity of cotton and cotton yarn in terms of notifications/Policy Circulars
referred above. The issues raised have been examined and accordingly the
following clarifications are issued:
| Sl. No. |
Issues raised |
Clarification |
| 1 |
Can the request for cancellation of RCs issued for
cotton prior to 01.08.2011 under following categories be accepted: (i) Partially
utilized (ii) Completely unutilized alongwith request for RC with another buyer.
(iii) Completely unutilized and requested for surrender/cancellation of
RCs. |
Notification No. 63 of 04.08.2011 provided that RCs
issued before 01.08.2011 would lose its validity unless revalidated. In
view of above, requests for cancellation/ surrender of partially
utilized/unutilized RCs issued prior to 01.08.2011 for export of cotton
should be accepted by RAs without invoking any penalty clause. |
| 2 |
Can the request for cancellation of RCs issued for
cotton, cotton yarn and cotton waste under following categories be
accepted: (i)
Partially utilized (ii) Completely unutilized alongwith request for RC with
another buyer. (iii) Completely unutilized and requested for
surrender/cancellation of RCs. |
In terms of Notification No. 62 dated 02.08.2011, the
exporters have the option to obtain more than one RCs. Therefore, in
case any exporter wants to surrender some RCs as unutilized/partially
utilized, a penalty of Rs. 10,000/- plus 1% of the FOB value of
shortfall quantity in excess of allowance of -5% should be imposed. |
| 3 |
A variation of -5% in weight against RCs for cotton
yarn has been allowed. Whether the same is applicable for raw cotton and
cotton waste also. |
Yes. The same dispensation will also apply in
case of cotton(HS codes 5201 & 5203). For RCs of cotton waste (HS code
5202) issued prior to 01.10.2011, the same will be applicable. |
| 4 |
Can the request for (i) change in buyers detail be
accepted. (ii) change in buyers name be accepted. |
It is permitted with the condition that export has to
be completed within the validity of RC. |
| 5 |
Can the request for extension of RC validity period
be accepted. |
The validity of RCs shall remain 30 days. But, one
time revalidation for 15 days from the date of expiry of RCs can be
permitted. |
| 6 |
Whether the tolerance limit of -5% in weight for
export of cotton be regularized if the firm pays a penalty of Rs.
10,000/- + 1% of the value of shortfall in excess of allowance of 5%.
|
Yes. |
| 7 |
In case, RC application was made by the firm alongwith
copy of FIRC or LC from a particular firm as a proof of receiving
advance payment against the contract. But, when they submitted the proof
of export, it is seen that they have not made the export to the assigned
buyer as per RC. They have requested to clarify whether party should be
insisted to explain why exports were not made to the assigned buyer from
whom payment was received by way of FIRC/LC. |
Many contracts are entered into with the foreign
buyers having addresses in different countries whereas the consignee is
of different countries. If such is the case, as per the contract and LC,
then it should be accepted. But, in cases other than this penal
provisions should be invoked. |
| 8 |
In case of cotton yarn/yarn waste in the event of
surrender of RC within validity or after expiry of validity, RC
surrendered shall be treated as non-fulfillment of quantity and the case
is to be regularized as per Trade Notice No. 19 dated 30.08.2011.
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Such cases should be regularized by way of imposition
of penalty. |
| 9 |
Whether request for amendment of quantity (either
enhancing or reducing) may be accepted. |
The same is permitted with the condition that export
has to be completed within the validity of RC. |
| 10 |
Whether loading of cargo meant for export(by
rail/road) at any place in the country within the validity of RC should
be accepted as fulfillment of export. |
No. The goods which have been physically handed over
to the customs at relevant ports and Let Export Order(LEO) issued within
the validity of RC can only be treated as fulfillment of export against
RC. |
4. This issues with the approval of Director General of Foreign Trade.
(Hardeep Singh)
Joint Director General of Foreign Trade
Email: [email protected]
(Issued from F.No 01/91/180/1194/AM10/Export Cell)
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