Clubbing of common inputs items allowed under Advance License Scheme for different export products can be clubbed for calculation of excess import

[Guest]

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.

[CSSANJAY MALHOTRA]

Dear,

FTP 2015-20 is applicable for Advance Licences issued under earlier FTP 2009-14 valid till 31.03.2015. Please refer to Para 4.38 of HBP 2015-20, which clearly specifies that if the Inputs are common, Clubbing can be done irrespective of Export product. SION norms for Export product will be considered based on norms specified for that product.

AI Summary

Clubbing of common inputs allows set off of excess duty free imports against shortages across export products under advance licence rules. Clubbing of common raw material inputs under the Advance Licence scheme is permitted irrespective of the export product; excess duty free imports against one licence may be set off against shortages under another licence provided the inputs are common, while the applicable SION norms for each export product continue to govern calculation of entitlement.