We have received Advance licence for export of 2 of our products. Both the products are exported under different HS code, however some of the Raw material inputs are common in both the products.
Due to cancellation of Export order for 1st product we were unable to fulfill export obligation, however we have imported duty free Raw material against that product. The exports obligation for 2nd product was fulfilled however duty free material was not imported against that product.
Our query is whether we can set off excess imports made against 1st Export product for common inputs against short duty free imports made against 2nd export product.
Clubbing Common Inputs Allowed for Different Export Products Under FTP 2015-20, Para 4.38 of HBP 2015-20 An inquiry was raised regarding the Advance License Scheme, specifically about clubbing common input items for different export products to calculate excess imports. The issue involved two products exported under different HS codes, sharing some raw materials. Due to the cancellation of an export order for the first product, the export obligation wasn't met, though duty-free raw materials were imported. The second product met its export obligation without importing duty-free materials. The query was whether excess imports for the first product could offset the shortfall for the second. The response clarified that under FTP 2015-20, clubbing is permissible for common inputs, as per Para 4.38 of HBP 2015-20. (AI Summary)
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