FTP 2014_2019

[JAIPRAKASH RUIA]

As per Para 6.08 (a), EOU unit may clear goods by paying concessional rate of duty upto the 90% of FOB value Export and Expected to Export of a specific product.

Please clarify the obligation if the material is cleared against expected to be export basis.

[Suryanarayana Sathineni]

Dear Friend,

It is Para 6.8 (a) and not 6.08(a) as stated by you.

As per this, an EOU other than gems and jewellery units can ...

• Sell in DTA upto to 50% of FOB value of its exports on payment of concessional duties
• If an EOU is manufacturing more than one product, then it can clear in DTA any of the products up to 90% its FOB Value ( of that particular product exported or expected to be exported) subject to the condition that th total value of clearances should be in the over all limit of 50% permitted.

Best Regards

Suryanarayana

[JAIPRAKASH RUIA]

Dear Sir,

Thank you for correcting me and your valuable reply, but my query is related to post reply and for " expected to export ".

What will be procedure for supply against "expected to export" and upto what period this export obligation should be made.

[JAIPRAKASH RUIA]

the Para as available in FTP on website.

6.08 DTA Sale of Finished Products / Rejects / Waste/ Scrap / Remnants and By-products

Entire production of EOU / EHTP / STP / BTP units shall be exported subject to following:

(a) Units, other than gems and jewellery units, may sell goods upto 50% of FOB value of exports, subject to fulfilment of positive NFE, on payment of concessional duties. Within entitlement of DTA sale, unit may sell in DTA, its products similar to goods which are exported or expected to be exported from units. However, units which are manufacturing and exporting more than one product can sell any of these products into DTA, upto 90% of FOB value of export of the specific products, subject to the condition that total DTA sale does not exceed the overall entitlement of 50% of FOB value of exports for the unit, as stipulated above. No DTA sale at concessional duty shall be permissible in respect of motor cars, alcoholic liquors, books, tea (except instant tea), pepper & pepper products, marble and such other items as may be notified from time to time.

Such DTA sale shall also not be permissible to units engaged in activities of packaging / labelling / segregation / refrigeration / compacting / micronisation / pulverization / granulation / conversion of monohydrate form of chemical to anhydrous form or vice-versa. Sales made to a unit in SEZ shall also be taken into account for purpose of arriving at FOB value of export by EOU provided payment for such sales are made from Foreign Currency Account of SEZ unit. Sale to DTA would also be subject to mandatory requirement of registration of pharmaceutical products (including bulk drugs). An amount equal to Anti Dumping duty under section 9A of the Customs Tariff Act, 1975 leviable at the time of import, shall be payable on the goods used for the purpose of manufacture or processing of the goods cleared into DTA from the unit.

[Suryanarayana Sathineni]

Dear Friend,

The Phrase " Expected to be exported" generally indicates that the proposed quantity/value of a particular new or existing products likely to be exported in a year based on the internal projections based on the market trends.

Further, the word used by you saying cleared against expected to export , can I presume that you mean that you are clearing a product in DTA against which you are expected to export?

Best Regards,

Suryanarayana

[DR.MARIAPPAN GOVINDARAJAN]

FTP PERIOD IS 2015-2020 NOT AS 2014-2019 MENTIONED BY YOU

AI Summary

DTA sale entitlement allows limited domestic clearance against expected exports, with product-specific allowances under an overall cap. DTA sale entitlement allows EOUs (other than gems and jewellery) to clear goods in DTA against exports or goods expected to be exported, on payment of concessional duties and subject to positive NFE; units with multiple products may clear a specific product at a higher product-specific proportion of its FOB value provided total DTA sales remain within the overall entitlement. Exclusions apply for specified goods and activities, SEZ sales may count toward FOB where paid from foreign currency accounts, pharmaceutical registrations are mandatory for DTA clearance, and an amount equal to applicable anti-dumping duty is payable on inputs.