Government of India
Ministry of Finance
Department of Revenue
Circular No. 20 /2012-Cus.
New Delhi dated the 27th July, 2012
To
All Chief Commissioners of Customs
All Chief Commissioners of Central Excise / Customs & Central Excise
All Director Generals under CBEC,
All Commissioners of Customs / Customs (Preventive)
All Commissioners of Central Excise /Customs & Central Excise
Madam / Sir,
Sub: Changes in the Foreign Trade Policy 2009-14 issued on 5.6.12 – reg
The
DGFT’s notification No. 1(RE-2012)/ 2009-2014 and
Public Notice
1(RE-2012)/2009-14 both dated 5.6.12 have issued a revised edition of the FTP
2009-14 effective 5.6.12. The revised edition of the FTP and the Handbook of
Procedures may necessarily be perused for all the details.
- In the areas that presently required changes to be made by Department of
Revenue, certain notifications and circulars have been issued:
-
Notification No.39/2012-Customs dated 12.06.2012 has been issued by TRU.
With this, the import of duty free embellishments allowed against export of
polyester made-ups, cotton made-ups and handloom made-ups has been extended to
export of man-made made-ups.
-
Notification No.42/2012-Customs dated 22.6.2012 amended notification Nos.
100, 101, 102, 103 and 104/2009-Cus. With these amendments,-
- The duty credit scrip under Status Holder Incentive Scheme (SHIS) can now
also be utilized, to the extent of 10% of duty credit amount in scrip originally
issued, for import of components, spares and parts for already imported capital
goods, subject to conditions. A limited transferability of these scrips has also
been permitted amongst status holders provided that the transferee status holder
is a manufacturer, subject to conditions.
- The notifications, for import of the specified capital goods, which had
effect till 31.12.2012, under zero duty Export Promotion Capital Goods (EPCG)
Scheme, including that for common service providers, will have effect till
31.12.2013. This is to implement the FTP provision that zero duty EPCG scheme
shall be in operation till 31.3.2013. Further, the condition that importer is
not currently availing any benefits under Technology Upgradation Fund Scheme
(TUFS) has been made subject to a proviso whereby the said condition will not be
applicable where the benefit under TUFS has been obtained but exact line of
business in TUFS is different from the line of business under EPCG or where
benefits availed under TUFS are refunded, with applicable interest, before
availing the zero duty EPCG authorization. The aspect of benefits, with
interest, having been refunded will be ensured by DGFT. Additionally, it has
been provided that the condition that the importer is not issued, in the year of
issuance of zero duty EPCG authorization, the duty credit scrips under SHIS
scheme, will not be applicable where already availed SHIS benefit that is
unutilized is surrendered or where benefits availed under SHIS that is utilized
is refunded, with interest, before availing zero duty EPCG authorization.
- Under both zero Duty EPCG and 3% duty EPCG schemes it has been provided that
the export obligation shall be 75% of the normal export obligation when
fulfilled by export of specified green technology products. Further, it has been
provided that for units located in Arunachal Pradesh, Assam, Manipur, Meghalaya,
Mizoram, Nagaland, Sikkim and Tripura, the export obligation shall be 25% of the
normal export obligation. This does not imply any change in the average export
obligation. These reflect provisions introduced in paras 5.10 and 5.12 of the
FTP. Also, it has been provided that in the case of export of goods relating to
carpet, coir and jute the EPCG authorization holders shall not be required to
maintain average export obligation/level of exports. This is in addition to the
exports already specified. This provisioning reflects changes made in para 5.7.6
of the
HBP, Vol. I.
- In respect of Common Service Providers (CSP), under both zero duty EPCG and
3% duty EPCG schemes, earlier, the details of the users and the quantum of
export obligation which each user will fulfill were required to be endorsed on
the EPCG authorization at the time of issue, and each one of the users of the
CSP, apart from the CSP, was required to furnish 100% bank guarantee (BG)
equivalent to their portion of duty foregone apportioned in terms of quantum of
export obligation to be discharged by them. These provisions have been modified.
As regards details of users, the CSP is now required to inform the same to the
concerned Regional Authority prior to exports, and the quantum of BG shall be
equivalent to duty foregone amount and BG can be given by CSP or any one of the
users or a combination thereof, at the option of CSP. These amendments reflect
changes introduced in para 5.3(b) of FTP.
-
Circular No.17/2012-Customs dated 5.7.12 relating to continuation of
verification of genuineness, of duty credit scrips issued under
chapter 3 of
FTP, before registration, is self explanatory.
-
Circular No.18/2012-Customs dated 5.7.12, relating to para (4) of Circular
No.38/2010-Customs, which illustrates certain vehicles which are in the nature
of professional equipment in connection with the Served from India Scheme
(SFIS), is self explanatory.
- Notification Nos. 29/2012-Central Excise to 33/2012-Central Excise all dated
9.7.2012 allow duty credit scrips issued under FPS, FMS, AIIS (under VKGUY),
VKGUY and SHIS schemes to be used for domestic procurement, subject to the
conditions laid down therein which have been provided keeping in view, inter
alia, the transferability/limited transferability of these scrips. It has also
been provided that the holder of the scrip, to whom the goods are cleared under
these Central Excise notifications, shall be entitled to avail the drawback or
Cenvat credit of duties of excise leviable against the amount debited in the
scrip and validated at the time of clearance. These notifications reflect para
3.17.5 (c) of FTP. The
Notification No. 44/2012-Customs dated 9.7.2012 makes
consequential changes in the notifications issued with respect to these scrips
for imports.
There are certain areas of change in the FTP which do not require amendments
in Customs notifications. Salient amongst these are –
- Earlier, the para 2.17 of FTP pertaining to second hand goods specifically
mentioned “Import of re-manufactured goods shall be allowed only
against a
license”. This does not find mention in the FTP issued on 5.6.12. The DGFT has
informed that such goods will be governed by the import policy applicable for
second hand items/goods under para 2.17 of FTP.
- In respect of the Agri Infrastructure Incentive Scrip (AIIS), the para
3.13.4(c) of FTP specifies the capital goods/equipment for cold storages, pack
houses etc, which are permitted for import. In terms of the existing
notification No.94/2009-Customs dated 11.9.2009, this scrip will now also be
eligible to be used for import of fourteen specified equipment (for setting up
of Pack Houses) that are notified in Appendix 37F of the HBP, Vol. I.
- In para 4.1.2 of FTP (applicable to Advance Authorization and DFIA schemes)
the formula/norm for Value Addition (except for gems and jewelery) has been
tightened by including reference to intent of claiming drawback, and in para
4.1.14 of FTP it has been made clear that drawback would be allowed only for
such duty paid items which have been endorsed on the authorization by the
Regional Authority. Field formations may specifically note this aspect in the
context of brand rate of drawback. Moreover, in terms of changes made in para
2.12 of HBP, Vol. I the normal periods of validity for the purpose of making
imports under Advance Authorization, Annual Advance Authorization and DFIA
schemes have been reduced to 12 months. Further, as per para 4.22 of HBP, Vol.
I, the period for fulfillment of export obligation has been reduced to 18
months, with certain exception. One extension of 6 months can be given by the
Regional Authority.
- The para 4.29 of HBP Vol. I has made an additional provision for Regional
Authority to intimate details of recovery/deposits to Commissioner of Central
Excise having jurisdiction over the factory of the authorization holder. This
was necessitated as authorizations are not registered at any Port when the
advance authorization is entirely invalidated for domestic sourcing of inputs.
The Commissioner of Central Excise will now be enabled to take a 360 degree view
and exercise due diligence in the matter.
- Para 5.3.3 of the HBP, Vol. I has clarified that separate authorization shall
be issued in case application is filed under para 5.2A of FTP [for restricted
import of spares with reduced export obligation, subject to conditions]
pertaining to EPCG scheme.
- In chapter 8 of the FTP, certain categories of supply of goods by
main/sub-contractors have been deleted from being regarded as deemed exports.
These are those under erstwhile para 8.2 (e) and (g) of FTP as it stood prior to
5.6.12.
- There are certain areas of change in the FTP for which notifications shall be
issued subsequently to make them operational. These include the specification of Vishakapatnam Airport in the Customs exemption notifications for the purposes of
import and export under the export promotion schemes (para 4.19 of HBP, Vol. I)
for which modalities are being worked out by DG (Systems) and Chief
Commissioner, Vishakapatnam; making operational the scheme of Post Export EPCG
duty credit scrip (para 5.11 of FTP) for which modalities are being worked out
in consultation with DGFT; changes made in para 5.2A of FTP notified on 5.6.12
w.r.t. catalyst for subsequent charge which are being reviewed by the DGFT.
- A change made in the FTP issued on 5.6.12 related to declaration of intent on
free shipping bills under para 3.11.8 of HBP, Vol. I. The position with respect
to this para was earlier governed by DGFT Public Notice No. 53(RE-2010)/ 2009-14
dated 3.6.2011. In the FTP issued on 5.6.12, the requirement of declaration of
intent was deleted. During post FTP discussions, the necessity of retention of
this provision was informed to the Department of Commerce and it was agreed that
the pre 5.6.12 position would be restored.
- This Circular covers salient features of the FTP effective 5.6.12 dealt by
the Drawback Division. It should be ensured that the FTP and Handbook of
Procedures issued effective 5.6.12, as well as above mentioned Customs and
Central Excise notifications and circulars are carefully perused for details.
The Circular may also be brought to the notice of all concerned by way of
issuance of standing order/instruction/trade notice. Difficulties faced, if any,
may please be brought to the notice of the Board.
Yours faithfully,
(Suresh Kumar)
Director (Drawback)
Telefax: 23360581
F.NO.605/12/2012-DBK
|