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Chapter - 2 General Provisions Regarding Imports and Exports

Chaper - 2 :General Provisions Regarding Imports And Exports

Exports and Imports free unless regulated 2.1 Exports and Imports shall be free, except where regulated by FTP or any other law in force.
The item wise export and import policy shall be, as specified in ITC (HS) notified by DGFT, as amended from time to time. Import of rough diamond from Cote d’Ivoire shall be prohibited in compliance to Paragraph 6 of UN Security Council Resolution (UNSCR) 1643(2005).

The import / export of rough diamond (HS Code 7102.10, 7102.21 or 7102.31) from / to Venezuela shall be prohibited in view of voluntary separation of Venezuela from the Kimberley Process Certification Scheme (KPCS). No Kimberley Process Certificate shall be accepted / endorsed / issued for import and export of rough diamonds from / to Venezuela.
(This DGFT Notification No.65(RE-2008)/2004-2009, Dated 1st December, 2008)

[Old - The import of rough diamond(HS Code 7102.10, 7102.21 and 7102.31) from Venezuela shall be prohibited in view of voluntary separation of Venezuela from the Kimberley Process Certification Scheme(KPCS) and to cease certification for export of its diamonds. (This DGFT Notification No.30(RE-2008)/2004-2009, Dated 13th August, 2008) ]
2.1.1 Import / export of arms and related material from / to Iraq shall be prohibited.
2.1.2 Direct or indirect export and import of following items, whether or not originating in Democratic People’s Republic of Korea (DPRK),to / from DPRK is prohibited:
All items, materials equipment, goods and technology including as set out in lists in documents S/2006/814,S/2006/815 and S/2006/
853(United Nations Security Council Documents) which could contribute to DPRK’s nuclear-related, ballistic missile-related or other weapons of mass destruction-related programmes.
2.1.3 Direct or indirect export and import of all items, materials, equipment, goods and technology which could contribute to Iran’s enrichment- related, reprocessing or heavy water related activities, or to development of nuclear weapon delivery systems, as mentioned below, whether or not originating in Iran, to / from Iran is prohibited:

i) items, listed in INFCIRC/254/Rev8/Part I in document S/2006/
814, in Sections B.2 to B.7 as well as A.I and B.I except supply, sale or transfer of equipment covered by B.I when such equipment
is for light water reactors and low-enriched uranium covered by A.1.2 when it is incorporated in assembled nuclear fuel elements for such reactors;

ii) items listed in S/2006/815 except supply sale or transfer of items covered by 19.A.3 of Category II.

Above-mentioned UN Security Council documents are accessible from DGFT web site.
Compliance with Laws 2.2 Every exporter or importer shall comply with the provisions of FT (D&R) Act, the Rules and Orders made there-under, FTP and terms and conditions of any Authorisation granted to him. All imported
goods shall also be subject to domestic Laws, Rules, Orders, Regulations, technical specifications, environmental and safety norms as applicable to domestically produced goods. No import or export of rough diamonds shall be permitted unless accompanied by
Kimberley Process (KP) Certificate as specified by Gem &
Jewellery EPC (GJEPC).
Interpretation of Policy 2.3 If any question or doubt arises in respect of interpretation of any
provision contained in FTP, or classification of any item in ITC (HS)
or HBP-v1 or HBP-v2, or Schedule of DEPB Rates (including content, scope or issue of an authorization there under), said question or doubt shall be referred to DGFT whose decision thereon shall be final and binding.
Procedure 2.4 DGFT may, specify procedure to be followed for an exporter or importer or by any licensing or any other competent authority for purpose of implementing provisions of FT (D&R) Act, the Rules and the Orders made there under and FTP. Such procedures shall
be published by means of a Public Notice, and may, in like manner, be amended from time to time.
Exemption from Policy / Procedure 2.5 DGFT may pass such orders or grant such relaxation or relief, as he
may deem fit and proper, on grounds of genuine hardship and adverse impact on trade.

DGFT may, in public interest, exempt any person or class or category of persons from any provision of FTP or any procedure and may, while granting such exemption, impose such conditions as he may deem fit. Such request may be considered only after consulting
Committees as under:

Sl. No. Description Committee
(i) Fixation / modification of product norms under all schemes Norms Committee
(ii) Nexus with Capital Goods (CG) and benefits under EPCG Schemes EPCG Committee
(iii) All other issues Policy Relaxation Committee (PRC)
Principles ofRestriction 2.6 DGFT may, through a notification, adopt and enforce any measurenecessary for: -
i Protection of public morals.

ii Protection of human, animal or plant life or health.

iii Protection of patents, trademarks and copyrights and the prevention of deceptive practices.

iv Prevention of use of prison labour.
v Protection of national treasures of artistic, historic or
archaeological value.

vi Conservation of exhaustible natural resources.

vii Protection of trade of fissionable material or material from which they are derived; and

viii Prevention of traffic in arms, ammunition and implements of war.
Restricted Goods 2.7 Any goods, export or import of which is restricted under ITC(HS) may be exported or imported only in accordance with an Authorisation or in terms of a public notice issued in this regard.
Terms and Conditions of a licence / CertificatePermission / Authorisation 2.8 Every Authorisation shall be valid for prescribed period of
validity and shall contain such terms and conditions as may be
specified by RA, which may include:
(a) Quantity, description and value of goods;

(b) Actual User condition;

(c) Export obligation;

(d) Value addition to be achieved; and

(e) Minimum export / import price.
Authorisation / Licence / Certificate /Permission, not a Right 2.9 No person may claim an Authorization as a right and DGFT or RAshall have power to refuse to grant or renew the same in accordance with provisions of FT (D&R) Act, Rules made there under and FTP.
Penalty 2.10 If anAuthorisation holder violates any condition of suchAuthorisation
or fails to fulfill export obligation, he shall be liable for action in accordance with FT (D&R) Act, the Rules and Orders made there under, FTP and any other law for time being in force.
State Trading 2.11 Any goods, import or export of which is governed through exclusive
or special privileges granted to STE(s), may be imported or exported by STE(s) as per conditions specified in ITC (HS). DGFT may, however, grant an Authorisation to any other person to import or export any of these goods.

Such STE(s) shall make any such purchases or sales involving imports or exports solely in accordance with commercial considerations, including price, quality, availability, marketability, transportation and other conditions of purchase or sale in a non discriminatory manner and shall afford enterprises of other countries adequate opportunity,
in accordance with customary business practices, to compete for participation in such purchases or sales.
Importer-Exporter Code (IEC) Number 2.12 No export or import shall be made by any person without an IEC
number unless specifically exempted.An IEC number shall be granted
on application by competent authority in accordance with procedure specified in HBP v1.

Trade with Neighbouring
2.13 DGFT may issue instructions or frame schemes as may be requiredto promote trade and strengthen economic ties with neighbouring countries.
Transit Facility 2.14 Transit of goods through India from / or to countries adjacent toIndia shall be regulated in accordance with bilateral treaties betweenIndia and those countries and will be subject to such restrictions asmay be specified by DGFT in accordance with InternationalConventions.
Trade with Russia under Debt-Repayment 2.15 In case of trade with Russia under Debt Repayment Agreement,
DGFT may issue instructions or frame schemes as may be required,
Agreement Actual User 2.16 and anything contained in FTP, in so far as it is inconsistent with suchinstructions or schemes, shall not apply.Capital goods, raw materials, intermediates, components,Condition consumables, spares, parts, accessories, instruments and othergoods, which are importable without any restriction, may be imported by any person.However, if such imports require an Authorisation, actual user alone may import such goods unless actual user condition is specificallydispensed with by RA.
Second Hand Goods 2.17 All second hand goods, except second hand capital goods, shall berestricted for imports and may be imported only in accordance withprovisions of FTP, ITC (HS), HBP v1, Public Notice or anAuthorisation issued in this regard.Import of second hand capital goods, including refurbished / re-conditioned spares shall be allowed freely. However, second handpersonal computers / laptops, photocopier machines, air conditioners,diesel generating sets will only be allowed against a licence. Import of re-manufactured goods shall be allowed only against alicence.
Scrap/Waste in SEZ 2.17A Any waste or scrap or remnant including any form of metallic waste& scrap generated during manufacturing or processing activities ofan SEZ Unit/ Developer/Co-developer shall be allowed to bedisposed in DTA freely subject to payment of applicable CustomsDuty.
Import of samples 2.18 Import of samples shall be governed by HBP v1.
Import of Gifts 2.19 Import of gifts shall be permitted where such goods are otherwisefreely importable under FTP. In other cases, a Customs ClearancePermit (CCP) shall be required from DGFT.
Passenger Baggage 2.20 Bonafide household goods and personal effects may be imported as part of passenger baggage as per limits, terms and conditions thereof in Baggage Rules notified by Ministry of Finance .Samples of such items that are otherwise freely importable under FTP may also be imported as part of passenger baggage without an
Authorisation. Exporters coming from abroad are also allowed to import drawings, patterns, labels, price tags, buttons, belts, trimming and embellishments required for export, as part of their passenger baggage without an Authorisation.
Import on 2.21 Freely exportable new or second hand capital goods, equipments,Export basis components, parts and accessories, containers meant for packingof goods for exports, jigs, fixtures, dies and moulds may be imported for export without an Authorisation on execution of LUT / BG withCustoms Authorities.
Re-import ofgoods repairedabroad 2.22 Capital goods, equipments, components, parts and accessories,whether imported or indigenous, except those restricted under ITC(HS) may be sent abroad for repairs, testing, quality improvementor upgradation or standardization of technology and re-importedwithout an Authorisation.
Import of goodsused in projectsabroad 2.23 After completion of projects abroad, project contractors may import,without anAuthorisation used goods including capital goods providedthey have been used for at least one year.
Sale on High Seas 2.24 Sale of goods on high seas for import into India may be made subjectto FTP or any other law in force.
Import under 2.25 Permission of RA is not required for import of capital goods under
Lease FinancingClearance ofGoods from Customs 2.26 lease financing.Goods already imported / shipped / arrived, in advance, but notcleared from Customs may also be cleared against an Authorisation issued subsequently.
Execution ofBG / LUT 2.27 Wherever any duty free import is allowed or where otherwisespecifically stated, importer shall execute prescribed LUT / BG /Bond with Customs Authority before clearance of goods. In caseof indigenous sourcing, Authorisation holder shall furnish LUT / BG/ Bond to RA concerned before sourcing material from indigenoussupplier / nominated agency as prescribed in HBP v1.
2.27.1 Deleted.
Private / Public Bonded Warehousesfor Imports 2.28 Private / Public bonded warehouses may be set up in DTA as per terms and conditions of notification issued by Do R.Any person may import goods except prohibited items, arms andammunition, hazardous waste and chemicals and warehouse them in such bonded warehouses. Such goods may be cleared for home consumption in accordance with provisions of FTP and against Authorisation, wherever required. Customs duty as applicable shall be paid at the time of clearance ofsuch goods.If such goods are not cleared for home consumption within a periodof one year or such extended period as the custom authorities maypermit, importer of such goods shall re-export the goods.
Free Exports 2.29 All goods may be exported without any restriction except to theextent that such exports are regulated by ITC (HS) or any otherprovision of FTP or any other law for time being in force.DGFT may, however, specify through a public notice such termsand conditions according to which any goods, not included in ITC(HS), may be exported without an Authorisation.
Export of Samples 2.30 Export of samples and Free of charge goods shall be governed byprovisions given in HBP v1.
Export of Passenger Baggage 2.31 Bonafide personal baggage may be exported either along withpassenger or, if unaccompanied, within one year before or afterpassenger’s departure from India. However, items mentioned asrestricted in ITC (HS) shall require an Authorisation. Governmentof India officials proceeding abroad on official postings shall,however, be permitted to carry alongwith their personal baggage,food items (free, restricted or prohibited) strictly for their personalconsumption.
Export of Gifts 2.32 Goods, including edible items, of value not exceedingRs.5,00,000/- 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 an Authorisation.
Export of Spares 2.33 Warranty spares (whether indigenous or imported) of plant, equipment, machinery, automobiles or any other goods, (except those restricted under ITC (HS)) may be exported along with main equipment, or subsequently but within contracted warranty period of such goods, subject to approval of RBI.
Third Party Exports 2.34 Third party exports, as defined in Chapter 9 shall be allowed underFTP.
Export of Imported Goods 2.35 Goods imported, in accordance with FTP, may be exported in sameor substantially same form without an Authorisation provided that item to be imported or exported is not restricted for import or export in ITC (HS).Exports of such goods imported against payment in freely convertible currency would be permitted against payment in freely convertible currency.
  2.36 Goods, including those mentioned as restricted for import (exceptprohibited items) may be imported under Customs Bond for exportin freely convertible currency without an Authorisation, provided that item is freely exportable without any conditionality / requirementof Licence / permission, as may be required under ITC (HS)Schedule II.
Export ofReplacement Goods 2.37 Goods or parts thereof, on being exported and found defective /damaged or otherwise unfit for use, may be replaced free of chargeby the exporter and such goods shall be allowed clearance byCustoms authorities, provided that replacement goods are notmentioned as restricted items for exports in ITC (HS).
Export ofRepaired Goods 2.38 Goods or parts, except restricted under ITC (HS) thereof, on beingexported 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 an Authorisationand in accordance with customs notification.
Private BondedWarehouses forExports 2.39 Private bonded warehouses exclusively for exports may be set up inDTA as per terms and conditions of notifications issued by DoR.Such warehouses shall be entitled to procure goods from domesticmanufacturers without payment of duty. Supplies made by adomestic supplier to such notified warehouses shall be treated asphysical exports provided payments are made in free foreignexchange.
Denomination of Export Contracts 2.40 All export contracts and invoices shall be denominated either in freely convertible currency or Indian rupees, but export proceeds shall be realised in freely convertible currency. However, export proceeds against specific exports may also be realized in rupees, provided it is through a freely convertible Vostro account of a non resident bank situated in any country other than a member country of ACU or Nepal or Bhutan. Additionally, rupee payment through Vostro account must be against payment in free foreign currency by buyer in his non-resident bank account. Free foreign exchange remitted by buyer to his non-resident bank (after deducting the bank service charges) on account of this transaction would be taken as export realization under export promotion schemes of FTP. Contracts [for which payments are received through Asian Clearing Union (ACU)] shall be denominated in ACU Dollar. Central Government may relax provisions of this paragraph in appropriate cases. Export contracts and Invoices can be denominated in Indian rupees against EXIM Bank / Government of India line of credit.
Realisation of Export Proceeds 2.41 If an exporter fails to realise export proceeds within time specifiedby RBI, he shall, without prejudice to any liability or penalty underany law in force, be liable to action in accordance with provisions ofFT (D&R) Act, Rules and Orders made there under and FTP.
Free movementof export goods 2.42 Consignments of items meant for exports shall not be withheld /delayed for any reason by any agency of Central / State Government.In case of any doubt, authorities concerned may ask for anundertaking from exporter

No seizure of Stock 2.42.1 No seizure of stock shall be made by any agency, so as to disrupt
manufacturing activity and delivery schedule of exports. In exceptional cases, concerned agency may seize the stock on basis of prima facie evidence. However, such seizure should be lifted within
7 days.
Export Promotion Councils (EPCs) 2.43 Basic objective of Export Promotion is to promote Councils (EPC) and develop Indian exports. Each Council is responsible for promotion of a particular group of products, projects and services
as given in HBP v1.
Registration -cum-Membership
Certificate (RCMC)
2.44 Any person, applying for:

(i) an Authorisation to import / export, [except items listed as restricted items in ITC(HS)] or

(ii) any other benefit or concession under FTP

  shall be required to furnish RCMC granted by competent authority in accordance with procedure specified in HBP-v1, unless specifically exempted under FTP. Certificate of Registration as Exporter of Spices (CRES) issued by Spices Board shall be treated as Registration-Cum-Membership Certificate (RCMC) for the purposes under this Policy.
2.45 Deleted
Trade Facilitationthrough EDI Initiatives 2.45.1 It is endeavor of Government to work towards greater simplification,standardization and harmonization of trade documents usinginternational best practices. As a step in this direction, DGFT shallmove towards an automated environment for electronic filing,retrieval and authentication of documents based on agreed protocolsand message exchange with other community partners includingCustoms and Banks.
DGCI&SCommercialTrade Data 2.45.2 To enable users to make commercial decisions in a more professional manner, DGCI&S trade data shall be made available with a minimum time lag, in a query based structured format, on a commercial criteria.
Fiscal Incentiveso promote EDIInitiatives adoption 2.45.3 With a view to promote use of Information Technology, DGFT will provide fiscal incentives to user community. Deductions in Application Fee would be admissible for applications signed digitallyor / and where application fee is paid electronically through EFT(Electronic Fund Transfer). Details are enumerated in HBP v1.
Regularization ofEO default andsettlement of customsduty and interest through Settlement Commission 2.46 With a view to providing assistance to firms who have defaultedunder FTP for reasons beyond their control as also facilitating merger,acquisition and rehabilitation of sick units, it has been decided toempower Settlement Commission in Central Board of Excise andCustoms to decide such cases also with effect from 01.04.2005.
Easing ofDocumentation
2.47 Pending finalisation of Single Common Document (SCD) for international trade, Government Departments dealing with exports and imports will honour Authorisation issued by other Government departments based on verification of export documents like shipping bill, bank realization certificate, Packing list, bill of lading etc. and will not insist upon fresh submission of these documents.
Exemption Remission of
 Service Tax in DTA
2.48.1 For all goods and services which are exported from units in DTAand units in EOU / EHTP / STP / BTP, exemption / remission ofservice tax levied and related to exports, shall be allowed, as perprescribed procedure in Chapter 4 of HBP v1.
Exemption fromService
 Tax in SEZ
2.48.2 Units in SEZ shall be exempted from service tax.
Exemption from
Service Tax on Services received
2.48.3 For all goods and services exported from India, services received /rendered abroad, where ever possible, shall be exempted fromservice tax.


DGFT as a acilitat or of
exports / imports
2.49 DGFT has a commitment to function as a facilitator of exports and imports Focus is on good governance, which depends on clean, transparent and accountable delivery systems.
Citizen’s Charter 2.49.1 DGFT has in place a Citizen’s Charter, giving time schedules forproviding services to clients, and details of grievance committees atdifferent levels.
Grievance Redressal Committee (GRC) 2.49.2 In order to facilitate speedy redressal of grievances of trade andindustry, a new grievance redressal mechanism has been put in placein the form of GRC by a Government Resolution.The Government is committed to resolving all outstanding problemsand disputes pertaining to past policy periods through GRC set up on 27.10.2004, for condoning delays, regularizing breaches by exporters inbonafide cases, resolving disputes over entitlements, granting extensions for utilization of Authorisations.
2.49.3 Deleted
2.50 Deleted.

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Date: 29-09-2023
NOTIFICATION No. 02/2023 – Integrated Tax
Seeks to notify the provisions of the Integrated Goods and Services Tax (Amendment) Act, 2023

Date: 29-09-2023
NOTIFICATIONNo. 48/2023 – Central Tax
Seeks to notify the provisions of the Central Goods and Services Tax (Amendment) Act, 2023

Date: 29-09-2023
NOTIFICATION No. 49/2023 – Central Tax
Seeks to notify supply of online money gaming, supply of online gaming other than online money gaming and supply of actionable claims in casinos under section 15(5) of CGST Act

Date: 29-09-2023
NOTIFICATION No. 50/2023 – Central Tax
Seeks to amend Notification No. 66/2017-Central Tax dated 15.11.2017 to exclude specified actionable claims

Date: 29-09-2023
Notification No. 11/2023- Central Tax (Rate)
Seeks to amend Notification No 01/2017- Central Tax (Rate) dated 28.06.2017.

Date: 29-09-2023
NOTIFICATION No. 03/2023 – Integrated Tax
Seeks to notify the supply of online money gaming as the supply of goods on import of which, integrated tax shall be levied and collected under sub-section (1) of section 5 of the Integrated Goods and Services Tax Act,2017

Date: 29-09-2023
NOTIFICATION No. 04/2023 – Integrated Tax
Seeks to provide Simplified registration Scheme for overseas supplier of online money gaming

Date: 29-09-2023
Notification No. 14/2023- Integrated Tax (Rate)
Seeks to amend Notification No 01/2017- Integrated Tax (Rate) dated 28.06.2017.

Date: 29-09-2023
Notification No. 11/2023- Union Territory Tax (Rate)
Seeks to amend Notification No 01/2017- Union territory Tax (Rate) dated 28.06.2017.

Date: 27-09-2023
Notification No. 69/2023-Customs (N.T.)
Notification to exempt deposits into ECL till 30th November 2023.

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