Duty exemption reform: additional customs duty on imported inputs with MODVAT claimability and mandatory Customs bonds. All inputs imported under Value Based and Quantity Based Advance Licences are chargeable to an additional customs duty claimable as MODVAT where permitted; drawback remains available except for basic customs duty on inputs allowed duty free, and MODVAT claim bars drawback of the same benefit. Importers must execute Customs bonds for duty differences unless discharge certificates are produced. Licences and imported goods are nontransferable until export obligations are discharged, after which transferability requires licensing endorsement. Goods supplied free for jobbing are exempt only if re-exported to the supplier with at least ten percent value addition, subject to Customs verification and bond enforcement.