MISCELLANEOUS PROVISIONS

• Advance Authorisation can be issued for few items which are prohibited for export. Items covered under Chapter 7 & 15 of ITC HS code are allowed to be exported under Advance Authorisation. Such exports shall be allowed subject to preimport condition. The export obligation period of advance authorization issued for such items shall be 90 days from the date of clearance of import consignment and no extension in EOP shall be allowed. No transfer of imported raw material (including job work) shall be permitted.
• Third party exports shall be allowed under FTP. In such cases, export documents such as shipping bills shall indicate name of both manufacturing exporter / manufacturer and third party exporter (s). Bank realization certificate (BRC), export order and invoice should be in the name of third party exporter.
• If the Norms are not fixed, the Exporter can submit the application to the Regional Authority for issue of Advance Authorisation on the basis of self-declaration (not for DFIA).
• There is a provision of Enhancement / Reduction in CIF Value of authorisation subject to the condition that value addition does not fall below stipulated minimum value addition.
• Clubbing of Authorisations:
  Facility of clubbing of more than one Authorisation will be available only for regularization purpose. After clubbing no imports or exports is allowed.

EXPORT OBLIGATION PERIOD

• Normally all advance authorization, export obligation period is 18 months from the date of issue of advance authorisation / DFIA. But certain sensitive products, the E. O. period issued is as per Appendix –4 J. (But import validity is 12 months only)
• APPENDIX – 4J Export Obligation Period for Specified inputs with Pre-import Conditions

  Sr. No.	Import Item (s)	Export Obligaon Period from the date of clearance of each import consignment by Customs Auhority
  1	Spice (a) Pepper: Cardamom and Chilies for Value Addion purpose like crushing / grinding / sterlisaon or for manufacture of oils and oleoresins and not for simple cleaning, grading, repacking etc 120 days However, for imports completed up to 31/12/2008, Export Obligaon Period (EOP) shall be 150 days (b) Spices other than pepper, cardamom and chilies for manufacture of Spice oils, Oleoresins. 12 Months (c) Other than (a) & (b) above 90 days
  2	Drugs (with a specific export order and pre-import condion)	12 Months
  3	Penicillin and its salts [ITC (HS) Code No. 29411010]	12 Months
  4	Tea	6 Months
  5	Coconut Oil	90 days
  6	Silk in any form	9 Months
  7	Drugs from unregistered sources	12 Months
  8	Precious Metal/Gold/Silver/Planum	120 days
  9	Raw Sugar	6 Months

ADVANCE AUTHORISATION UNDER PARA 4.11 (for sensitive items) (READ ALONG WITH PARA 4.07)

Advance authorization shall not be issued under para 4.07 by the Regional Authority for import of the few sensitive items such as Veg. oils, Cereals, Spices etc. However we can submit the application for Advance Authorisation for the said item under para 4.11 of the Policy Book.

All vegetable/edible oils classified under Chapter —15 and all types of oilseeds classified under Chapter —12 of ITC(HS) book

While Duty free import of spices covered by Chapter - 9 of ITC (HS) shall be permitted only for value addition purposes like crushing / grounding / sterilization or for manufacture of Oils and Oleoresins. Duty free import of spices shall not be permitted for simple cleaning, grading or re-packing purpose.

In such cases the application has to be filed to Regional Authority but Authorisation shall be issued only after the clearance from D.G.F.T., New Delhi.

Non Realisation of export proceeds

If an exporter fails to realize export proceeds within time specified by RBI, he shall, without prejudice be liable to any liability or penalty under any law in force.

• Exports / Supplies can be made any time after obtaining online file number for having submitted the application to the Regional Authority. The hard copy can be submitted subsequently but within 5 days.
• Advance Authorisation / DFIA will be issued showing the quantity and CIF value as limiting factors. The description, quality and technical characteristics will have to be adhered to as per notified SION.
• • Licence is issued with an Export Obligation period of 18 months, with 2 E.O. extension of 6 months each. (subject to composition fees) & valid for import for 12 months (+ 1 Revalidation for six months)
  • First E.O. Extension of EO period upto six months from the date of expiry of EO period subject to payment of composition fee of 0.5% of the shortfall in E.O.
  • 2nd E.O. Extension of six months after extension as considered by Regional Authority, provided Authorisation holder has fulfilled minimum 50% export obligation in quantity as well as in value, on pro-rata basis. This will be subject to payment of composition fee @ 0.5% per month on unfulfilled FOB value of export obligation. Authorization holder will have to submit a certificate to RA from an Independent Chartered Accountant/Chartered Engineer certifying that unutilised imported/domestically procured inputs are available with the applicant.
• Validity of Authorisation for Import / Export :Authorisaiton must be valid on the date of import and export.

VERY IMPORTANT

• All exempted materials along with wastage should be mentioned in Customs/Proforma Invoice & Shipping Bills. This is a mandatory requirement for obtaining EODC. If it is Deemed Exports, Invoice duly attested by their Excise authorities showing exempted material/ components on net to net basis including wastage and file number is mandatory.
• To avoid any problem with the Excise authorities we strongly recommend you to clear the consignments under Excise Bond only without payment of duty.
• If supply to EOU / SEZ, kindly get Bill of Exports, Invoice and ARE-3/ARE-1 form duly attested by Excise Authorities showing list of raw materials (including wastage) and file number.
• We suggest you that as soon as you start the exports against particular License, kindly send us the Customs Proforma Invoice (one or two times) for our approval to avoid any problem in future either with the Customs or Licensing Authorities.

PRECAUTION (Very Important)

2.9 The description & ITC (HS) Code in Shipping Bill, Bill of Exports, Bills of Entry and Authorization should tally exactly as per the Advance Authorization / EPCG Licence & MEIS Scheme.

IMPORT STAGE

• The following duties are exempted :
  • Basic Customs Duty.
  • Additional Customs Duty including Education Cess. (Not for DFIA)
  • Anti Dumping Duty / Safeguard Duty / Transition Product Specific Safeguard Duty (these are however payable on deemed exports under para 7.02 (c), (d) & (g)
• LUT/BG: In case the authorisation holder wishes to import, the inputs against the Advance Authorisation, prior to exports, he can do so by furnishing the Bank Guarantee / LUT to the Customs Authorities as per the guidelines of Custom Circular No. 58/04 dated 21.10.2004. However, the following categories of Exporter can clear the goods against Advance Authorisation on furnishing LUT.
  • Exporters having minimum export turnover of Rs. 5 crores in the current or preceding year and having three years export performance in the past.
  • Public Sector Undertaking
  • Status Holder
  • Manufacturer Exporter registered with Excise Authority and having minimum export turnover of Rs. 1 crore and above in the preceding year and having export during pre-vious 2 financial years (This provision is not applicable to Proprietorship & Partnership firms).
  • Manufacturer Exporter registered with Central Excise who has paid Rs. 1 crore or more Excise Duty during preceding financial year.
  • Manufacturer Exporter not covered above has to give Bank Guarantee to the extent of 15% of duty saved.
  • Others including Merchant Exporter and Service Provider have to give Bank Guarantee to the extent of 100% of the duty saved. (except Status Holder).

  For procurement of raw material from the Indigenous Manufacturer, the exporter has to give a Bank Guarantee / LUT to Regional Licensing Authority.

• Date of Reckoning of Import / Export: (Be aware)
  • Date of reckoning of import is decided with reference to date of shipment / dispatch of goods form supplying country and not the date of arrival of goods at an Indian port.
  • Date of reckoning of export is decided with reference to date of shipment / dispatch of goods from India.
  • Very Important: Earlier Advance Authorization were valid till end of the month irrespective of date of expiry but w.e.f. 01/04/2015, the licence shall expire on the date of expiry itself. (i.e. not valid till end of the month)

IMPORTANT POINTS

• Advance Authorisation or materials imported are not transferable even after completion of export obligation. In case Bank Guarantee / LUT has been redeemed, the Licensee can get the duty free inputs processed from any manufacturer under Actual User Condition i.e. for domestic sale.
• Goods already imported / shipped / arrived in advance but not cleared from Customs are also allowed for clearance against Advance Authorisation issued subsequently.
• The authorisation holder can procure the inputs from Indigenous sources / EOU etc. against Invalidation Certificate / ARO to be issued by the Regional Authorities in terms of para 4.14 of Handbook