TaxTMI 
TaxTMI 
Duty Exemption / Remission Schemes
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.... Authorisation is issued to allow duty free import of input, which is physically incorporated in export product (making normal allowance for wastage). In addition, fuel, oil, catalyst which is consumed / utilized in the process of production of export product, may also be allowed. (b) Advance Authorisation is issued for inputs in relation to resultant product, on the following basis: (i) As per Standard Input Output Norms (SION) notified (available in Hand Book of Procedures); OR (ii) On the basis of self declaration as per paragraph 4.07 of Handbook of Procedures. OR (iii) Applicant-specific prior fixation of norm by the Norms Committee as per para 4.06 of Handbook of Procedures. OR (iv) On the basis of Self Ratification Scheme in terms of Para 4.06 of Foreign Trade Policy. 4.04 Advance Authorisation for Spices Duty free import of spices covered under Chapter-9 of ITC (HS) shall be permitted only for activities like crushing / grinding / sterilization / manufacture of oils or oleoresins. Authorisation shall not be available for simply cleaning, grading, re-packing, etc. 4.04A Special Advance Authorisation S....
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.... physically incorporated in the export product (making normal allowance for wastage). Only Physical exports shall fulfill the export obligation. (viii) Provisions of paragraphs 4.02, 4.05(a), 4.13(i), 4.13(ii), 4.14, 4.15, 4.17, 4.19, 4.21(i), 4.21(ii), 4.21(iii), 4.21(iv), 4.22, and 4.23 of Foreign Trade Policy shall be applicable in so far as they are not inconsistent with this scheme. 4.05 Eligible Applicant / Export /Supply (a) Advance Authorisation can be issued either to a manufacturer exporter or merchant exporter tied to supporting manufacturer. (b) Advance Authorisation for pharmaceutical products manufactured through Non-Infringing (NI) process (as indicated in paragraph 4.18 of Handbook of Procedures) shall be issued to manufacturer exporter only. (c) Advance Authorisation shall be issued for: (i) Physical export (including export to SEZ) (ii) Intermediate supply; and/or (iii) Supply of goods to the categories mentioned in paragraph 7.02 (b), (c), (d), (e), (f) and (g) of this FTP. (iv) Supply of 'stores' on board of foreign going vessel / aircraft, subject to condition that there is specific Standard Input Output ....
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....e status holder in the current year and last three FYs. c) If status holder is unable to obtain the AEO certification within 120 days from date of application under this scheme para, the exporter agrees that the facility under this para shall stand withdrawn and he (status holder) will be bound to approach the concerned Norms Committee of DGFT for fixation of norms and to abide by the decision of the said Committee. d) In case of situation as at (c) above, no further authorisation under this scheme para will be issued. e) The DGFT may deny authorisation under this scheme para to two star and above status holder based on its risk management principles. f) Status holder shall be audited by the DGFT as laid down in the Handbook of Procedures. (vi) The scheme shall not be available for the following export products: a) All items covered under Chapter-1 to 24 and Chapter-71of ITC(HS) Classification; b) Biotechnology items and related products; and c) SCOMET items. (vii) The scheme shall not be available for the following inputs: A. All vegetable / edible oils classified under Chapter-15 and all types of oilsee....
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....evenue of government, if he is of the opinion at any stage of scrutiny/enquiry/investigation that the norms have not been claimed correctly or the excess benefit has been availed. Special audit can be conducted even if the manufacturer has already been audited before. (xii) If the audit results in detection of mis-declaration and/or instances of claiming of inputs which are not used in manufacturing process or excess quantity of inputs than consumed, demand and recovery actions will be initiated in addition to initiation of action against the authorisation holder, manufacturer and Chartered Engineer in terms of Foreign Trade Development and Regulation Act 1992 and/or Customs Act 1962, as amended and rules made there under. (xiii) In cases where Chartered Engineer has not exercised due diligence or has willfully become party to misdeclaration action will be initiated under against such person under FT(D&R) Act 1992, as amended and rules made there under. In addition, such cases shall also be referred to 'The Institute of Engineers India' for taking action as warranted under the bylaws of the institute. (xiv) All the provisions applicable for Advance Authorisation Scheme sha....
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....; iii. All Spices other than light black pepper (light berries) having a basic customs duty of more than 30%, classified under Chapter-9 and 12 of ITC (HS)book; iv. All types of fruits/ vegetables having a basic customs duty of more than 30%, classified under Chapter-7 and Chapter-8 of ITC(HS) book; v. Horn, Hoof and any other organ of animal; vi. Honey; vii. Rough Marble Blocks/Slabs; viii. Rough Granite; ix. Vitamins except for use in pharmaceutical industry; and x. All items with a basic custom duty of more than 30%. (b) For export of perfumes, perfumery compounds and various feed ingredients containing vitamins, no Authorisation shall be issued by Regional Authority under paragraph 4.07 of Handbook of Procedures and applicants shall be required to apply under paragraph 4.06 of Hand Book of Procedures to the Norms Committee. (c) Where export and/or import of biotechnology items and related products are involved, Authorisation under paragraph 4.07 of Handbook of Procedures shall be issued by Regional Authority only on submission of a "No Objection Certificate" from Department of Biotechnology. 4.12 A....
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....y, if any. However, imports under Advance Authorisation for physical as well as deemed exports are also exempt from whole of the Integrated Tax and Compensation Cess leviable under sub-section (7) and sub-section (9) respectively, of section 3 of the Customs Tariff Act, 1975 (51 of 1975). 4.15 Admissibility of Drawback Drawback as per rate determined and fixed by Customs authority in terms of DoR Rules shall be available for duty paid imported or indigenous inputs (not specified in the norms) used in the export product. For this purpose, applicant shall indicate clearly details of duty paid input in the application for Advance Authorisation. As per details mentioned in the application, Regional Authority shall also clearly endorse details of such duty paid inputs in the condition sheet of the Advance Authorisation. 4.16 Actual User Condition for Advance Authorisation i. Advance Authorisation and / or material imported under Advance Authorisation shall be subject to 'Actual User' condition. The same shall not be transferable even after completion of export obligation. However, Authorisation holder will have option to dispose of product manufactured out of duty free input....
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....ce Authorisation without mandatory Quality Control Orders (QCOs) Import of Inputs under Advance Authorisation, without compliance to the mandatory QCOs, shall be subjected to the following conditions: (i) Import of inputs under the Advance authorisation without compliance to the mandatory QCOs shall be with pre-import condition. Such inputs shall be utilised in the manufacturing of the export product (making normal allowance for wastage) and shall be exported under the same authorisation. (ii) Exemption from mandatory QCOs shall be specifically endorsed in the Advance authorisation, upon the request of the authorisation holder. Imports under Authorisation without specific endorsement of exemption shall be made in accordance with mandatory QCOs. (iii) Any unutilised imports or the products manufactured with inputs imported without compliance to the mandatory QCOs, shall not be transferred to DTA, even after regularisation of default in fulfilment of export obligation. For the purpose of this para, unutilised imports means imported inputs (without compliance of mandatory QCOs) which have not been accounted for, as per SION/Ad-hoc Norms, in the product exported under the s....
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....ion simultaneously or subsequently. v. Advance Authorisation holder under DTA can procure inputs from / SEZ units against Certificate of supply till EDI message system between SEZ and Customs is enabled. vi. Validity of Advance Release Order / Invalidation Letter shall be co- terminous with validity of Authorisation. 4.21 Currency for Realisation of Export Proceeds. i. Export proceeds shall be realized in freely convertible currency or in Indian Rupees as per para 2.53 of FTP, except otherwise specified. Provisions regarding realisation and non-realisation of export proceeds are given in paragraph 2.52, 2.53 and 2.54 of FTP. ii. Export to SEZ Units shall be taken into account for discharge of export obligation provided payment is realised from Foreign Currency Account of the SEZ unit. iii. Export to SEZ Developers / Co-developers can also be taken into account for discharge of export obligation even if payment is realised in Indian Rupees. iv. Authorisation holder needs to file Bill of Export for export to SEZ unit/ developer / co-developer in accordance with the procedures given in SEZ Rules, 2006. 4.22 Export Obligation Period and its Extension Period f....
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....Import Authorisation shall be issued for an input which is subjected to pre-import condition or where SION prescribes 'Actual User' condition or Appendix-4J prescribes pre import condition for such an input. 4.27 Minimum Value Addition Minimum value addition of 20% shall be required to be achieved. 4.28 Validity &Transferability of DFIA (i) Applicant shall file online application to Regional Authority concerned before starting export under DFIA. (ii) Export shall be completed within 12 months from the date of online filing of application and generation of file number. (iii) While doing export/supply, applicant shall indicate file number on the export /supply documents viz. Shipping Bill / Bill of Export / Tax invoice for supply prescribed under GST rules. (iv) In terms of Para 4.12 of FTP, Wherever SION permits use of either (a) a generic input or (b) alternative input, the specific input together with quantity [which has been used in manufacturing the export product] should be indicated / endorsed in the relevant Shipping Bill/ Bill of Export / Tax invoice for supply prescribed under GST rules. Only such inputs may be permitted for import in the authorisation ....
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....grated Tax and Compensation Cess leviable under Section 3(7) and 3(9) of Customs Tariff Act) input for manufacture of export product. 4.31 Items of Export (i) "Gold jewellery, including partly processed jewellery, and articles including medallions and coins (excluding legal tender coins), whether plain or studded, containing gold of 8 carats and above up to a maximum limit of 22 carats. Gold religious idols (only gods and goddess) of 8 carats and above (up to 24 carats) subject to the following conditions: i) Exports would be subject to 100% examination by the Approved Government Valuer. ii) Foreign remittance has to be realized within a period of 3 months from the date of export. iii) Exporters must submit confirmed export order before effecting export. iv) Distinction must be made between a religious idol and simply moulded gold article/idol. v) Exports may be allowed only be actual manufactures of such idols. The findings like posts, push backs, locks which help in collating the jewellery pieces together, containing gold of 3 carats and above up to a maximum limit of 22 carats. (ii) Silver jewellery including partly processed....
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.... for duty free (excluding Integrated Tax and Compensation Cess leviable under Section 3(7) and 3(9) of Customs Tariff Act) import of Consumables, Tools and other items namely, Tags and labels, Security censor on card, Staple wire, Poly bag (as notified by Customs) for Jewellery made out of precious metals (other than Gold & Platinum) equal to 2% and for Cut and Polished Diamonds and Jewellery made out of Gold and Platinum equal to 1% of FOB value of exports of the preceding year, may be issued on production of Chartered Accountant Certificate indicating the export performance. However, in case of Rhodium finished Silver jewellery, entitlement will be 3% of FOB value of exports of such jewellery. This Authorisation shall be non- transferable and subject to actual user condition. (ii) Application for import of consumables as given above shall be filed online to the concerned Regional Authority in ANF 4H. 4.36 Advance Authorisation for Precious Metals (a) Advance Authorisation shall be granted on pre-import basis with 'Actual User' condition for duty free (excluding Integrated Tax and Compensation Cess leviable under Section 3(7) and 3(9) of Customs Tariff Act) import of: ....
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....he applicable schemes. The monitoring mechanism for the Nominated Agencies (other than banks authorised by RBI) shall be as per para 4.93 of HBP. (v) A bank authorised by Reserve Bank of India is allowed export of gold scrap for refining and import standard gold bars as per Reserve Bank of India guidelines. 4.41 Import of Diamonds for Certification / Grading & Re-export Following agencies are permitted to import diamonds to their laboratories without any import duty, for the purpose of certification / grading reports, with a condition that the same should be re-exported with the certification/grading reports, as per the procedure laid down in Hand Book of Procedures: (1) Gemological Institute of America (GIA), Mumbai, Maharashtra. (2) Indian Diamond Institute, Surat, Gujarat, India. (3) De Beers India Private Ltd., Surat, Gujarat, India. (4) HRD Diamond Institute Private Limited, Mumbai, Maharashtra, India ^8[(5) International Gemmological Institute (India) Limited, Bandra Kurla Complex, Mumbai.] (6) Gemological Science International (GSI) Pvt. Ltd., Mumbai, Maharashtra, India. 4.42 Export of Cut & Polished Diamonds ....
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....silver / platinum jewellery, precious, semi-precious stones, beads and articles and export of branded jewellery is also permitted, subject to conditions as in Handbook of Procedures. 4.46 Personal Carriage of Export /Import Parcels Personal carriage of gems and jewellery export parcels by foreign bound passengers and import parcels by an Indian importer/foreign national may be permitted as per the Handbook of Procedures. 4.47 Export by Post Export of jewellery through Foreign Post Office including via Speed Post is allowed. The jewellery parcel shall not exceed 20 kgs by weight. 4.48 Private / Public Bonded Warehouse Private / Public Bonded Warehouses may be set up in SEZ/ DTA for import and re-export of cut and polished diamonds, cut and polished coloured gemstones, uncut & unset precious & semi- precious stones, subject to achievement of minimum value addition of 5% by DTA units. 4.49 Special Notified Zone (SNZ) Import, auction/sale and re-export of rough diamonds by entities, as notified vide RBI Notification 116 of 1st April, 2014, as amended from time to time, on consignment or outright basis, will be permitted in Special Notified Zone (SNZ) administere....
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....of Procedures and Customs Rules and Regulations. SCHEME FOR REMISSION OF DUTIES AND TAXES ON EXPORTED PRODUCTS 4.54 Scheme Objective and Operating Principles i. The Scheme's objective is to refund, currently unrefunded: a. Duties/ taxes / levies, at the Central, State and local level, borne on the exported product, including prior stage cumulative indirect taxes on goods and services used in the production of the exported product and b. Such indirect Duties/ taxes / levies in respect of distribution of exported product. ii. The rebate under the Scheme shall not be available in respect of duties and taxes already exempted or remitted or credited. iii. The determination of ceiling rates under the Scheme will be done by a Committee in the Department of Revenue/Drawback Division with suitable representation of the DoC/DGFT, line ministries and experts, on the sectors prioritized by Department of Commerce and Department of Revenue. iv. The overall budget/outlay for the RoDTEP Scheme would be finalized by the Ministry of Finance in consultation with Department of Commerce (DoC), taking into account all relevant factors. v. The Scheme will operate in....
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....amount in the form of a transferable duty credit/electronic scrip (e-scrip), which will be maintained in an electronic ledger by the Central Board of Indirect Taxes & Customs (CBIC). Necessary rules and procedure regarding grant of RoDTEP claim under the Scheme and implementation issues including manner of application, time period for application and other matters including export realization, export documentation, sampling procedures, record keeping etc. would be notified by the CBIC, Department of Revenue on an IT enabled platform with a view to end to end digitization. Necessary provisions for recovery of rebate amount where foreign exchange is not realized, suspension/withholding of RoDTEP in case of frauds and misuse, as well as imposition of penalty will also be built suitably by CBIC. x. The Scheme will take effect for exports from 1st January 2021. However for exports made by categories under Para 4.55 (x), (xi) and (xii), the implementation date will be decided later as per provisions of Para 4.55B. 4.55 Ineligible Supplies/ Items/Categories under the Scheme The following categories of exports/ exporters shall not be eligible for rebate under RoDTEP Scheme: ....
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....sidered by an Inter-Ministerial Committee, named as "RODTEP Policy Committee (RPC)" chaired by DGFT (comprising members of Department of Commerce and Department of Revenue), whose decisions would be binding. 4.59 The Appendix 4R containing the eligible RoDTEP export items, rates and per unit value caps, wherever applicable is available at the DGFT portal www.dgft.gov.in under the link 'Regulatory Updates >RoDTEP'. ^4[4.59A For exports of products manufactured by AA holders (except Deemed Exports), EOU and SEZ units, the eligible RoDTEP export items, rates and per unit value caps, wherever applicable, are contained in Appendix 4RE and is available at the DGFT portal (www.dgft.gov.in) under the link >Regulations>RoDTEP] ^6[4.60 Diamond Imprest Authorisation (DIA) Diamond Imprest Authorization may be granted for the import of Natural Cut and Polished Diamonds, including semi-processed, half-cut, and broken diamonds, each weighing no more than 4 Carat (25 Cents), against which the physical export of Natural Cut and Polished Diamonds has to be carried out. Such Authorisation shall carry an export obligation to achieve a minimum value addition of 10% by realizing in Free Fore....
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....cation No. 69/2023 dated 07-03-2024 3. Substituted vide Notification No. 70/2023 dated 08-03-2024 before it was read as, "Under the Scheme, a rebate would be granted to eligible exporters at a notified rate as a percentage of FOB value with a value cap per unit of the exported product, wherever required, on export of items which are categorized under the notified 8 digit HS Code. However, for certain export items, a fixed quantum of rebate amount per unit may also be notified. Rates of rebate / value cap per unit under RoDTEP will be notified in Appendix 4R. In addition to necessary changes which may be brought in view of budget control measures as mentioned above, efforts would be made to review the RoDTEP rates on an annual basis and to notify them well in advance before the beginning of a financial year." 4. Inserted vide Notification No. 70/2023 dated 08-03-2024 5. Omitted vide Notification No. 70/2023 dated 08-03-2024 w.e.f. 11.03.2024 before it was read as, "viii. Products manufactured in EHTP and BTP." 5A. Omitted vide Notification No. 70/2023 dated 08-03-2024 w.e.f. 11.03.2024 before it was read as, "x. Products manuf....