Export and Import Management

IIMMDH0220068154 Export and Import Management

Q 1 (a) The First amp Second Export and Import Policies were announced in 1992 and Mar 1997 respectively The Second policy is operating currently and applies for all Export amp Imports What are the objectives of Imports amp Exports (Control) Act 1947 and Present Second Policy

Answer-

INTRODUCTION -

Trade policy governs exports from and imports into a country It is one of the various policy instruments used by a country to attain her goals of economic develop-ment This policy is thus formulated keeping in view the national priorities for economic development and the international commitments made by the country It is essential that the entrepreneurs and the export managers understand the trade policy as it provides the vital inputs for the formulation of their business growth strategies In India the trade policy Le export-import policy is formulated by the Ministry of Commerce Government of India in terms of section 5 of the Foreign Trade (Development and Regulation) Act1992Besides the Government of India also announced on January 302002 a Medium Term Export strategy to guide the formulation the Export-Import Policy 2002 - 07 with the objective of achieving a share of 1 in world trade by the end of 2006 - 07 from the present I share of 06 (2000 - 01) The text of this strategy is given as Appendix VII at the end of the book The present Export - Import Policy was announced on 3132002 for a period of 5 years with effect from 142002 to 3132007 co-terminus with Tenth Five Year Plan It covers both the trade in merchandise and services The present chapter explains legal framework affecting foreign trade of India particularly with reference to Export-Import Policy 2002 - 2007 It also discusses the preferential trading arrangements affecting exports and imports of India

MEANING- The foreign trade of India is guided by the Export-Import (EXIM) Policy of the government of India arid is regulated by the Foreign Trade (Development and Regulation) Act 1992 EXIM Policy contains various policy decisions taken by the government in the sphere of foreign trade ie with respect to imports and exports from the country and more especially export promotion measures policies and procedures related thereto It is prepared and announced by the Central Government (Ministry of Commerce) Indias EXIM policy in general aims at developing export potential improving export performance encouraging foreign trade and creating favourable balance of payments position

LEGAL FRAMEWORK FOR FOREIGN TRADE OF INDIA-

In India the legal framework for the regulation of foreign trade is mainly provided by the Foreign Trade (Development and Regulation) Act 1992 Garments Export Entitlement Policy 2000-2004 Export (Quality Control and Inspection) Act 1963 Customs and Central Excise Duties Drawback Rules 1995 Foreign Exchange Management Act 1999 -and the Customs and Central Excise Regulations

The main objective of the Foreign Trade (Development and Regulation) Act is to provide for the development and regulation of foreign trade by facilitating imports into and augmenting exports from India This Act has replaced the earlier law namely the imports and Exports (Control) Act1947 A comparison of the nomenclature of the two Acts makes it very dear that there is a shift in the focus of the law from control to development of foreign trade This shift in the focus is the outcome of the emphasis on liberalisation and globalisation as a part of the process of economic reforms initiated in India since June 1991

The application of the provisions of the Foreign Trade (Development amp Regulation) Act 1992 has been exempted for certain trade transactions vide Foreign Trade (Exemption from application of Rules in certain cases) Order 1993

GENERAL OBJECTIVES OF THE EXIM POLICY -

1

Government control import of non-essential items through an import policy At the same time all-out efforts are made to promote exports Thus there are two aspects of trade policy the import policy which is concerned with regulation and management of imports and the export policy which is concerned with exports not only promotion but also regulation The main objective of the Government policy is to promote exports to the maximum extent Exports should be promoted in such a manner that the economy of the country is not affected by unregulated exports of items specially needed within the

country Export control is therefore exercised in respect of a limited number of items whose supply position demands that their exports should be regulated in the larger interests of the country In other words the policy Aims at

(i) Promoting exports and augmenting foreign exchange earnings and (ii) Regulating exports wherever it is necessary for the purposes of either avoiding competition among the Indian exporters or ensuring domestic availability of essential items of mass consumption at reasonable prices

The government of India announced sweeping changes in the trade policy during the year 1991 As a result the new Export-Import policy came into force from April I 1992 This was an important step towards the economic reforms of India In order to bring stability and continuity the policy was made for the duration of 5 years In this policy import was liberalised and export promotion measures were strengthened The steps were also taken to boost the domestic industrial production The more aspects of the export-import policy

(1992-97) include introduction of the duty-free Export Promotion Capital Goods (EPCG) scheme strengthening of the Advance Licensing System waiving of the condition on export proceeds realisation rationalisation of schemes related to Export Oriented Units and units in the Export Processing Zones The thrust area of this policy was to liberalise imports and boost exports

The need for further liberalisation of imports and promotion of exports was felt and the Government of India announced the new Export-Import Policy (1997 2002) This policy has further simplified the procedures and reduced the interface between exporters and the Director General of foreign Trade (DGFT) by reducing the number of documents required for export by half Import has been further liberalised and efforts have been made to promote exports

The new EXIM Policy 1997-2002 aims at consolidating the gains made so far restructuring the schemes to achieve further liberalisation and increased transparency in the changed trading environment It focusses on the strengthening the domestic industrial growth and exports and enabling higher level of employment with due recognition of the key role played by the SSI sector It recognises the fact that there is no substitute for growth which creates jobs and generates income Such trade activities also help in stimulating expansion and diversification of production in the country The policy has focussed on the need to let exporters concentrate on the manufacturing and marketing of their products globally and operate in a hassle free environment The effort has been made to simplify and streamline the procedure

The objectives will be achieved through the coordinated efforts of all the departments of the government in general and the ty1inistry of Commerce and the Directorate General of Foreign Trade and its network of Regional Offices in particular Further it will be achieved with a shared vision and commitment and in the best spirit of facilitation in the terest of export

in OBJECTIVES OF THE EXIM POLICY 1997 -2002

The principal objectives of the EXIM Policy 1997 -2002 are as under

2

a To accelerate the economy from low level of economic activities to high level of economic activities by making it a globally oriented vibrant economy and to derive maximum benefits fro~ expanding global market opportunities b To stimulate sustained economic growth by providing access to essential raw materials intermediates components consumables and capital goods required for augmenting production c To enhance the technoloca1 strength and efficiency of Indian agriculture industry and services thereby improving their competitiveness d To generate new employment Opportunities and encourage the attainment of internationally accepted standards of quality e To provide quality consumer products at reasonable prices

HIGHLIGHTS OF THE EXIM POLICY 1997-2002

a Period of the Policy 10487131048713This policy is valid for five years instead of t1ree years as in the case of earlier policies It is effective from 1st April 1997 to31st March 2002

b Liberalisation 10487131048713A very important feature of the policy is liberalisation 10487131048713It has substantially eliminated licensing quantitative restrictions and other regulatory and discretionary controls All goods except those coming under negative list may be freely imported or exported

c Imports Liberalisation 10487131048713Of 542 items from the restricted list 150 items have been transferred to Special Import Licence (SIL) list and remaining 392 items have been transferred to Open General Licence (OGL) List

d Export Promotion Capital Goods (EPCG) Scheme 10487131048713The duty on imported capital goods under EPCG scheme has been reduced from 15 to 10 10487131048713Under the zero duty EPCG Scheme the threshold limit has been reduced from Rs 20 crore to Rs 5 crore for agricultural and allied Sectors e Advance Licence Scheme

10487131048713Under Advance License Scheme the period for export obligation has been extended from 12 months to 18 months 10487131048713A further extension for six months can be given on payment of 1 of the value of unfulfilled exports

f Duty Entitlement Pass Book (DEPB) Scheme 10487131048713Under the DEPB an exporter may apply for credit as a specified percentage of FOB value of exports made in freely convertible currency

1048713 Such credit can be can be utilised for import of raw materials intermediates components parts packaging materials etc for export purpose

g Special Import Licence (SIL) 1048713 150 items from the restricted list have been transferred to SIL 1048713 SIL on exports from SSIs has been increased from 1 to 2 1048713 Export houses and all forms of trading houses are eligible for additional SIL of 1 on exports of products from SSIs from North Eastern States 1048713 Additional SIL has been declared for exploration of new markets and for export of agro products 1048713 The SIL entitlement of exporters holding ISO 9000 certification has been Increased from 2 to 5 of the FOB value of exports

h Export Houses and Trading Houses -

The criteria for recognition of export houses and all forms of trading houses has been modified

(AMOUNT IN RS CRORES) FOR 2000-01 PERIOD

FOB Criterion NFE Criterion

3

Annual Average FOB value of export made during preceding 3 licensing

FOB value of export made during preceding licensing years

Annual Average FOB value of export made during preceding 3 licensing years

EH 15 22 12 18

TH 75 112 62 90

STH 375 560 312 450

SSTH 1125 1680 937 1350

(i) Deemed Exports -

1048713 Deemed exports facilities have been extended to oil and gas sectors in addition to power sector

(j) Software

1048713 Software units can undertake exports using data communication links or through courier service 1048713 Import of computer systems has been brought under the purview of EPCG scheme

(k) Computerisation of DGFT Offices

1048713 By 1998 most DGFT transactions will be on line so as reduce paper work and avoid delay in disposal of applications l) SSI Units

10487131048713SIL on exports from SSls has been increased from 1 to 2 10487131048713 Export houses and all forms of trading houses are eligible for additional SIL of

1 on exports of products from SSls from North eastern States

10487131048713Reduction of threshold level to Rs 5 crore from Rs 20 crore under EPCG scheme will benefit SSls

(m) Agriculture Sector

10487131048713Double weightage will be given for agro exports in calculating the eligibility for export houses and all forms of trading houses 10487131048713Additional SIL of 1 has been declared for export of agro products 10487131048713EOUs and units in EPZs in agriculture and allied sectors can sell 50 of their output in the domestic tariff area (DT1) on payment of duty 10487131048713Under the zero duty EPCG Scheme the threshold level has been reduced from Rs 20 crore to Rs 5 crore for agriculture and allied sectors

IMPLICATIONS OF THE EXIM POLICY 1997 ndash2002

The major implications of the EXIM Policy 1997-2002 are

4

(a) Globalisation of Indian Economy

10487131048713The EXIM policy 1997-02 proposed to prepare a framework for globalisation of Indian economy 10487131048713This is evident from the very first objective of the policy which states To accelerate the economy from low level of economic activities to- high level of economic activities by making it a globally oriented vibrant economy and to derive maximum benefits from expanding global market opportunities 10487131048713The Indian economy has been exposed to more foreign competition The regime of high protection is gradually vanishing 10487131048713It means in order to survive Indian companies will have to pay due attention to cost reduction improvement in quality delivery schedules and after sales service 10487131048713At the same time Indian industryrsquos have also been given an opportunity to globalise their business by allowing them to import machineries and raw materials from abroad on liberal terms

(a) Impact on the Indian Industry

10487131048713In the EXIM policy 1997-02 a series of reform measures have been introduced in order to give boost to Indias industrial growth and generate employment opportunities in non-agricultural sector 10487131048713The reduction of duty from 15 to 10 under EPCG scheme will enable Indian firms to import capital goods This will improve the quality and productivity of the Indian industry 10487131048713However liberalisation of imports by transferring 542 items from restricted list to OGL and SIL list would adversely affect the growth of consumer goods industry in India as most of these items are consumer goods items

(b) Impact on Agriculture - Many encouraging steps have been taken in order to give a boost to Indian agricultural sector

10487131048713Double weightage for agro exports while calculating the eligibility for export houses and all forms of trading houses 10487131048713Additional SIL of 1 for export of agro products 10487131048713EOUs and units in EPZs in agriculture and allied sectors can sell 50 of their output in the domestic tariff area (DTA) on payment of duty 10487131048713Under the zero duty EPCG Scheme the threshold level has been reduced from Rs 20 crore to Rs 5 crore for agriculture and allied sectors

(c) Impact on Foreign Investment

10487131048713In order to encourage foreign investment in India the EXIM policy 1997 02 has permitted 100 foreign equity participation in the case of 100 EOUs and units set up in EPZs 10487131048713Due to liberalisation of procedural formalities foreign companies may bee attracted to set up manufacturing units in India 10487131048713Full Convertibility of Indian Rupee on revenue account would also give a fillip to foreign investment in India

(d) Impact on Quality Upgradation

10487131048713The SIL entitlement of exporters holding ISO 9000 certification has been increased from 2 to 5 of the FOB value of exports 10487131048713This would encourage Indian industries to undertake research and development programmers and upgrade the quality of their products 10487131048713Liberalisation of EPCG scheme would encourage Indian industries to import capital goods and improve quality and increase productivity of goods

5

(e)Impact on Self-reliance-

10487131048713One of the long-term objectives of the Indian planning is to become self reliant This objective is well reflected in the EXIM Policy 1997-02 10487131048713The policy aims at encouraging domestic sourcing of raw materials so as to build up a strong domestic production base 10487131048713In order to achieve this the policy has also extended the benefits given toexporters to deemed exporters This would lead to import substitution 10487131048713Oil power and natural gas sectors have also been brought under the purview of deemed exports

However the globalisation policy of the government may harm the interests of SSls and cottage industries as they may not be able to compete with MNCs

Q 1 (b) Most of the Industries apply for lsquoAdvance Licencersquo explain the main ingredients of it

Answer-

A new scheme of Annual Advance Licence (ALL) has been notified in the Exim Policy (RE-99) 97-2002 The scheme has come into operation from 171999 The details of the scheme have already been notified under paragraph 74A of the Exim Policy and para 754 of the Handbook of Procedure (Vol I) (Refer Public Notice No1097-2002 dated 7699)

1 ELIGIBILITY

The following categories of exporters are eligible for Annual Advance Licence (AAL)

i) Manufacturer exporter with export performance of Rs1 crore in the preceding year and registered with Excise authorities except for products which are not excisable for which no registration is required

ii) Export House Trading House Star Trading House and Super Star Trading Houses holding certificates as merchant exporter who are ready to furnish names of supporting manufacturers along with their registration certificates A copy either of his own manufacturing registration or of his supporting manufacturer in support of his claim shall be required

In case of excisable product a copy of excise registration certificate of exportersupporting manufacturer will be required

iii) The Head officeRegistered office of a company can apply for AAL giving full address of the factorysupporting manufacturer where the inputs shall be used in the resultant products an AAL can also be filed to the licensing

6

authority under whose jurisdiction the manufacturing unit is located

2 ENTITLEMENT

i) Eligible applicants are entitled for AAL upto 125 of the average FOB value of exports in the preceding three licensing years

ii) One AAL for one export product group shall be issued

iii) Each AAL shall have one Port of Registration for imports Exports can take place from any port mentioned in para 719 of Handbook of Procedures

iv) The applicant is entitled to import any input covered under SIO Norms as given in Handbook of Procedures (Vol I) in respect of export of any product in the product group for which the AAL shall be issued In addition he will be eligible to import packaging materials as per SIO normsgeneral policy for packaging materials given in Handbook of Procedures (Vol I)

v) The applicant can also procure the materials indigenously through ARO for which he has to furnish quantity of material relevant technical characteristics and value and irrevocable option in writing for using the specific indigenous inputs Once the endorsement of using specific indigenous inputs is allowed against AAL no amendment thereon shall be allowed

vi) Imports under Annual Advance Licence shall be exempted from basic customs duty including surcharge additional customs duty special additional duty anti dumping duty and safeguard duty Since the inputs are exempted from additional customs duty the applicant is not entitled for the benefit under Rule 12(1)(b) or Rule 13(1)(b) of Central Excise Rules 1944 in respect of exports made under Annual Advance Licence

vii) No exports shall be allowed under AAL unless the applicant mentions the specific AAL number and date in the shipping bill

viii) Exporters who have already availed the benefit of advance licensing for production programme scheme up to 30th June 1999 shall be required to give the details of production programme licence obtained and their entitlement shall be reduced to that extent while issuing the Annual Advance Licence (AAL) for the remaining period

3 APPLICABILITY OF DRAWBACK

No drawback shall be allowed under Annual Advance Licence to exporter except for cases where the applicant for Annual Advance Licence wants to use indigenous inputs and give and irrevocable option in writing for using the specific indigenous inputs The licensing authority shall make an endorsement in the licence stating that the licence holder shall not import _________ (specify the indigenous inputs) under this Annual Advance Licence To enable the applicant to claim drawback as per Drawback Rules no amendments to this endorsement shall be allowed after issuance of the licence

4 EXPORT OBLIGATION

The Annual Advance Licence is valid for 12 (twelve) months for imports and 18 (eighteen) months for exports from the date of issue A specific endorsement shall be made by the licensing authority stating that this licence shall be presented before the licensing authority for giving full account of the inputs in product exported as per Standard Input Output Norms before the expiry of 20 months from the date of issue of the licence Before expiry of this period the licence holder shall furnish proof of having fulfilled export obligation by submitting the documents as prescribed in paragraph 725 of the Handbook of Procedures (Vol I) In case of bona fide default the licence holder can apply for regularisation in terms of paragraph 728 of the Handbook of Procedures (Vol I)

5 DOCUMENTS TO BE SUBMITTED

7

i) Application in the prescribed format with application fee as applicable

ii) Valid RCMC IEC Profile

iii) In case of Status Holder

self-attested copies of valid status certificate copies of registration certificates of manufacturing units where the exempt materials are to be used for export production in case of merchant status holder complete details of supporting manufacturers and their registration certificates with consent letters should be submitted

iv) In case of manufacturer exporter

CA Certificate regarding average export turnover more than Rs1 crore in the preceding three licensing years as per App26 of Handbook of Procedures Registration Certificate with Central Excise

v) In case of export of non-excisable product

a certificate from the excise authority to the effect that the product is non- excisable and that as such no excise registration is required Registration Certificate of the manufacturing units (SSI registration IEM etc) concerned

vi) A statement of export products proposed to be exported with a total fob covered under one product group and the total cif value of imports

(SUBRAT RATHO)

ADDITIONAL EXPORT COMMISSIONER amp ZJDGFT

CONDITIONS TO BE INCORPORATED IN THE ANNUAL ADVANCE LICENCE NO

---------------------------------------------------------------------------- DT FOR RS ISSUED IN FAVOUR OF MS

1 This licence is issued in terms of para 74a of export and import policy and para 754 of handbook of procedures 1997-2002 as amended from time to time

2 Licence shall be valid for 12 months for imports and 18 months for exports from the date of its issuance

3 Exports and imports shall be subject to export import policy in force

4 The exempted goods imported against this licence shall only be utilised in Accordance with the provisions of export import policy 1997-2002 and custom Notification no 4899 dt 29499 as amended from time to time The licence andor Material imported under this licence shall not be transferable even after completion Of export obligation

5 The licencee shall maintain the nexus between imported inputs and the resultant Product as per sio norms

6 The licence is subject to all general conditions as applicable and as laid down In the handbook of procedures 1997-2002 volii (standard input output norms book)

7 The licencee at the time of imports shall furnish the details of inputs Including its specifications and relevant technical characteristics (such as Gradesdeniergsmpuritymarks and numbersactive ingredient contents etc) to the Custom authorities for making entries in the deec (import) at the time of exports Technical characteristics shall be declared to establish nexus and entries will be Made accrodingly in the deec (export)

8

8 The licencee shall maintain a true and proper account of consumption and Utilisation of goods imported against this licence

9 The licencee is not entitled for the benefit under rule 12(1)b or rule 13(1)(b) Of central excise rules 1984 in respect of exports made under this licence

10 The licence holder shall not be eligible for drawback against exports made Under this licence unless the inputinputs are procured indigenously

11 The foreign exchange remittance and realisation against this licence will be Governed by the guidelines issued by the reserve bank of india from time to time

12 The foreign exchange realisation obligation shall also be governed by the Provisions of the exim policy and handbook of procedures prevalent on the relevant date

13 This licence shall be presented before the licensing authority for giving full Account of the inputs in product exported as per sion before expiry of twenty months From the date of issue of the licence Simultaneously the licence holder shall Furnish proof of having fulfilled the export obligation by submitting the documents as Prescribed in para 725 of handbook of procedures vol I

14 If a licence holder fails to discharge the prescribed export obligation and Does not apply for regularisation of bona fide default within the permitted time the Licensing authority shall initiate action against licence holder as per provisions of The foreign trade (development and regulation) act 1992 as amended from time to time

15 Necessary bondbg is to be executed with the customs authorities as per the relevant customs notification before first importation

16 The licence holder is entitled to import any inputs covered under standard input output norms as given in vol Ii in respect of the export product falling under the product group specified in the licence in addition the licence holder can import packing material required for packing of the export product which shall be accounted for as per sio norms Where packing materials are not covered under sio norms the same shall be accounted for as per general policy for packing materials in handbook of procedures 1997-2002

Q 2 (a) Enumerate the general conditions applicable for export obligation under Export Promotion of Capital goods scheme (EPCGS)

Answer-

The following conditions shall apply to the fulfillment of the export obligation

The export obligation shall be fulfilled by the export of goods manufactured or produced by the use of the capital goods imported under the scheme The export obligation may also be fulfilled by the export of same goods for which EPCG licence has been obtained manufactured or produced in different manufacturing units of the licence holder specified supporting manufacturer(s) vendor(s)However if exporter is processing further to add value on the goods so manufactured the export obligation shall stand enhanced by 50

The exports shall be direct exports in the name of the EPCG licence holder However the export through third party(s) is also allowed provided the name of the EPCG Licence holder is also indicated on the shipping bill If a merchant exporter is the importer the name of the supporting manufacturer shall also be indicated on the shipping bills At the time of export the EPCG licence No and date shall be endorsed on the shipping bills which are proposed to be presented towards discharge of export obligation

9

Export proceeds shall be realised in freely convertible currency except for deemed exports under paragraph 65(iv) However in case of exports against irrevocable letter of credit in free foreign exchange realisation of export proceeds need not be insisted for fulfillment of export obligation

Exports shall be physical exports However deemed exports asspecified in paragraph 102 (a) (b) (d) (f) and (g) of Policy shall also be counted towards fulfillment of export obligation but the EPCG licence holder shall not be entitled to claim any benefit under paragraph 103 of this Policy in respect of such deemed exports The supplies made to the Oil and Gas sector may be counted towards discharge of export obligation against an EPCG licence provided the licence has been issued on or before 3132000 and no benefit under paragraph 103 of the Policy has been claimed on such supplies

The export obligation under the scheme shall be in addition to any other export obligation undertaken by the importer except the export obligation for the same product as defined in paragraph 65(vi) below The export obligation under the scheme shall be over and above the average level of exports achieved by him in the preceding three licensing years for same and similar products Wherever the average level of export was fixed taking into account the exports made to such countries as are notified by the DGFT from time to time for this purpose the average level of exports shall be reduced by excluding exports made to these countries This waiver shall be applicable to all EPCG licences which have not been redeemed regularised

However exports made against any EPCG licence except the EPCG licences which have been redeemed shall not be added up for calculating the average export performance for the purpose of the subsequent EPCG licence If the exporter achieves an export of 75 of the annual value of the production of the relevant export product the export obligation against the EPCG licence shall be subsumed under that export provided the aggregate value of such exports during the specified period shall not be less than the aggregate value of the export obligation fixed under paragraph 62 of this Policy

Where the manufacturer exporter has obtained licences for the manufacture of the same export product both under EPCG and the Duty Exemption or Diamond Imprest Licence Scheme or made exports under DEPBDFRC replenishment licences the physical exports made under these Schemes shall also be counted towards the discharge of the export obligation under EPCG scheme

In case of export of computer software agriculture aquaculture animal husbandry floriculture horticulture pisciculture viticulture poultry and sericulture the export obligation shall be determined in accordance with paragraph 62 of the Policy but the licence holder shall not be required to maintain the average level of exports as specified in sub- paragraph (v) above

The export obligation shall be fulfilled by the export of goods capable of being manufactured or produced by the use of the capital goods imported under the scheme

bull The import of capital goods for creating storage and distribution facilities for products manufactured or services rendered for export by the EPCG license holder would be permitted under the EPCG Scheme

bull The export obligation under the scheme shall be over and above the average level of exports achieved by him in the preceding three licensing years for same and similar products within the overall export obligation period including extended periodExport obligation may also be fulfilled by exports of other good(s) manufactured or service(s) provided by the same firmcompany or group company managed hotel which has the EPCG license

bull The incremental exports to be fulfilled by the license holder for fulfilling the remaining export obligation can include any combination of exports of the original product service and the substitute product (s) service (s)

bull The export obligation under the scheme shall be in addition to any other export obligation undertaken by the importer except the export obligation for the same product under Advance License DFRC DEPB or Drawback scheme

Exports shall be physical exports in the case of export of computer software the export obligation shall be determined in accordance with policy but the conditions that exports shall be over and above the average level of exports in the preceding three licensing years shall not apply

10

bull Royalty payments received in freely convertible currency and foreign exchange received for Ramp D services shall also be counted for discharge under the EPCG scheme

bull Payments received against lsquoCounter Salesrsquo in free foreign exchange through banking channels as per the RBI guidelines shall be counted for fulfillment of export obligation

Q 2 (b) India is attaining prominence for export of diamonds gems amp Jewellery with a major share in the world market explain ldquoDiamond Imprest and Replenishmentrdquo Licences

Answer-

The Diamond Imprest licences are advance licences issued to facilitate the regular diamond exporters to import sufficient rough diamonds so that their production cycle does not get hampered The rough diamonds can be imported from any source and the exporters have to fulfill the export obligation in accordance with the procedures laid down in the Handbook

An exporter can apply for Diamond Imprest Licence for the Import of rough diamonds

a) Equal to the best export performance of cut and polished diamonds in the licensing year during the preceding three licensing years if he has a minimum of three years export performance or

b) Against valid export order in his own name The Diamond Imprest licences are normally valid for a period of 12 months from the date of issue but if advance remittance to DTC London has been effected within the validity period of such licence and the import could not be effected within the validity period of the licence then for the purpose of custom clearance such Diamond Imprest licence shall stand automatically revalidated for a period of one month

The Diamond Imprest licence holders are allowed to pay commission or brokerage charges upto 15 of the CIF value of the import provided there is a corresponding increase in the export obligation

In respect of Diamond Imprest licences issued against past export performance basis subsequent application for the issuance of another licence can be made if 75 of the export obligation fixed on the earlier licence has been fulfilled

The application for Diamond Imprest Licence should be made as below

1) Applications against valid export contract

a) A covering letter stating all the enclosures

b) Bank receipt in duplicatepay orderdemand draft favouring the Regional Licensing Authorities evidencing the payment of licence fee

c) A statement of value of the licence required based on the valid export contract

d) The application form as per Appendix 15-B of Handbook duly filled in and signed

11

e) A declaration regarding number of banks through whom the export documents have been routed by the applicant with a No realizations outstanding certificate from their bankers stating that there are no realizations outstanding for more than six months from the date of exports effected by the exporter through them

f) A copy of Importer ndashExporter code number certificate

g) A copy of Registration cum Membership certificate issued by the Gem and Jewellery Export Promotion Council

h) A copy of the Enrolment Number certificate

a All pre and post shipment credit facilities given by the banks in terms of Dollars to diamonds importers exporters operating under DDAS shall be designated in Dollars and be reflected as borrowings in their DDAS Export realisation as well as dollar realisation from local sale of rough polished diamonds shall be credited immediately to such dollar accounts on receipt of the same

b DDAS eligible firms and companies may be allowed to open a Diamond Dollar Account with their bankers A maximum of two Diamond Dollar Accounts would be allowed with two separate banks

c The sources of dollars in Dollar Accounts shall be i bank finance

ii export proceeds from shipments of polishedrough diamonds and iii sale proceeds from local sales of polished rough diamonds

d An exporter local seller of cut amp polished diamonds operating under DDAS may apply for Replenishment licence to the Regional Licensing Authority (RLA) of DGFT in accordance with the para 82 of the Exim Policy and para 82 to 87 of Handbook (Vol1) While making this application the exporter will give an undertaking that the said application will operate under DDAS Regional Licensing Authority shall calculate its entitlement as per Appendix 30A and issue Replenishment licence However Replenishment licence issued under DDAS shall be non transferable and this will be so specifically indicated by the Regional Licensing Authority Regional Licensing Authority will make an endorsement on these Replenishment licences that payment for import against these licences shall be made from Diamond Dollar Account only On receipt of payments against export local sales on the basis of self declaration indicating the value addition by the exporterlocal seller the bank will credit the value addition part to Rupee Account and balance to Diamond Dollar Account and issue a certificate The exporter will produce such certificate(s) from the concerned bank as to the amounts credited to Diamond Dollar Account amp Rupee Account to the RLA alongwith the Replenishment licence application The RLA will issue the Replenishment licence after satisfying itself that all requirements have been met While effecting import of rough diamonds under DDAS the exporter will make payments from DDA and will clear the consignment from Custom against these Replenishment licences issued under this scheme only Such payments can be made in advance whenever permitted or after clearance of the parcel Similarly the exporter can buy rough diamonds from the local market from DDA holder on payment of dollars from DDA and debit of Replenishment licences issued under this scheme

e In respect of local purchase of cut amp polished diamonds the buyer will pay to the seller the purchase value in dollars alongwith a disclaimer certificate with respect to the licence according to appendix 30A for the local purchases on the basis of which the seller will apply to the office of the RLA for the Replenishment Imprest obligation application as per Appendix 30A enclosing therewith the certificate from the bank giving details of the value and invoice of cut and polished diamonds sold by him locally There shall not be more than one transaction of a particular salepurchase before export and the seller exporter will give a self declaration to this effect Exporter will make an application to the RLA on monthly basis based on the export realisations received less the disclaimer certificates for licences issued by him if any in accordance with Appendix 30A for the local purchase of cut amp polished diamonds the payments for which have been made from the Diamond Dollar Account

f Bulk licences for rough diamonds may be issued as per paragraph 810 and 811 of Exim Policy and paragraph 821 to 826 of Handbook (Vol1) A bulk licence holder in addition to the present scheme may also operate under Diamond Dollar Account Scheme then while making the application the applicant will specifically give a declaration to this effect to the RLA RLA while issuing Bulk Licence will make an endorsement on this Bulk licence that payment for import of rough diamonds against this Bulk licence shall be made from Diamond Dollar Account only This bulk licence holder can sell rough diamonds against production of valid Diamond Imprest Licence Replenishment licence Gem Replenishment licence to a buyer who is operating under Diamond Dollar Account Scheme Buyer will make payment for purchase of such rough diamonds in dollars from his Diamond Dollar Account The bulk licencee shall

12

follow the procedure as given in para 824 and 825 of Handbook (Vol1) Bulk licencee will be able to import rough diamonds by making payment from his Diamond Dollar Account and will submit Bulk Licence issued under this scheme to Custom Authorities at the time of clearance A bulk licence holder operating under DDAS is also permitted to sell to an exporter not operating under DDAS against valid Diamond Imprest Licence Replenishment licence Gem Replenishment licence but against payment in Dollar obtained from the bank by debiting exporters Exchange Control copy of the licence and the payment so received shall be credited to the Diamond Dollar Account of the Bulk Licence holder

g Diamond Imprest Licence may be issued as per para 83 to 85 of Exim Policy and para 811 to 820 of Handbook (Vol1) In case the applicant wants to operate under Diamond Dollar Account Scheme he will give a declaration to this effect to Regional Licensing Authority RLA will issue Diamond Imprest Licence with a specific endorsement that this licence shall be operated under Diamond Dollar Account Scheme The Licence holder will produce this licence before the concerned bank with whom Diamond Dollar Account has been opened who may permit remittance of dollars for purchase of rough diamonds equivalent to CIF value of this licence On receipt of payments against export local sales on the basis of self declaration indicating the value addition by exporter local seller the bank will credit the value addition part to Rupee Account and balance to Diamond Dollar Account and issue a certificate the exporter will produce such certificate(s) from the concerned banks as to the amounts credited to Diamond Dollar Account and Rupee Account to the RLA at the time of application for redemption The RLA will issue the redemption additional entitlement if any after satisfying itself that all requirements have been met

h Customs appraisal shall be applicable to physical imports exports as at present and shall not apply to domestic sale purchase of rough polished diamonds

i The procedure and documents for physical imports and exports shall remain unchanged for DDA holders including the requirement of Diamond Imprest Licence Rep Licence Bulk Licence Gem Rep Licence and replenishment norms (Appendix 30A) prescribed in the Exim Policy

Q 3 (b) Describe Export Promotion council and also mention its functions in detail

Answer-

Export Promotion Councils

EPCHs are one of the leading organizations who work for the development of handicrafts industry They are managed by govt bodies to make it more responsible and positive Their various objectives aims at creating positive and healthy environment for handicraft community and products in the international arena In our EPCH section we have listed few of these bodies and provided detailed information on their functioning and role

Handloom Export Promotion Council (HEPC)

The driving force to magnify the elegance of handloom varieties with exquisite excellence(Sponsored by Ministry of Textiles Government of India) Handloom Export Promotion Council (HEPC) functions as a non-profit making company under section 25 of the Companies Act The Memorandum and Articles of Association framed by the Council govern the company It is a statutory body constituted under The Ministry of Textiles Government of India to promote the exports of all handloom products like fabrics home furnishings carpets and floor coverings etc Constituted in the year of 1965 with 65 members and today it has a membership around 2000 spreading all over the country The Handloom industry mainly exports fabrics bed linen table linen toilet and kitchen linen towels curtains cushions and pads tapestries and upholsterys carpets and floor coverings etc The HEPC functions with the main objective to provide all kind of support and guidance to the Indian Handloom exporters and the International buyers for trade promotion and international marketing With its headquarter at Chennai and regional offices at Mumbai and New Delhi it is administered by an Executive Committee consisting of elected representatives from the export trade ex-officio members and nominated Government officials The committee is headed by Chairman who holds his office for the period of two years along with Vice Chairman The secretary (Executive Director) of the council anGovernment assists the council to run the administration Primary objectives of HEPC

13

Organizing participation in the fairs exhibitions and buyer-seller meets in India and Abroad It aims to provide guidance consultation and support to the handloom exporters in view to promote handloom exports Laying down standards of quality and packaging in respect of Indian Handlooms for export It approves agents representatives or correspondence in foreign markets for continuous reporting of prices market preferences and reception accorded to Indian Handloom products

The Handloom Export Promotion Council 34 (Old No 18) Cathedral Garden Road Nungambakkam Chennai - 600 034 India Tel 91-44- 28278879 28276043 Fax 91-44- 28271761 E-mail hepccatpvsnlcomCOIR BOARD OF INDIA

Performing effective functions to promote the coir industry

Coir Board is a statutory body established by the Government of India under a legislation enacted by the Parliament namely Coir Industry Act 1953 (45 of 1953) to promote Coir Industry in India as a whole The main functions of the Board as laid down in Section 10 of the Coir Industry Act are 1 Promotion of coir industry with all possible measures a) Promoting exports of coir yarn and coir products and carrying on propaganda for that purpose b) Regulating the production of husks coir yarn and coir products under the supervision of the Central Government by registering coir spindles and looms for manufacturing coir products c) Undertaking assisting or encouraging scientific technological and economic researches to maintain one or more research institutes d) Collecting statistics from manufacturers of and dealers in coir products It can also obtain such information from the other persons related to the coir industry The publication of statistics so collected or portions thereof or extracts therefrom e) Fixing grade standards and necessary inspection of coir fibre coir yarn and coir products f) Improving the marketing of coconut husk coir fibre coir yarn and coir products in India preventing unfair competition g) Setting up or assisting in the setting up of factories for the producers of coir products with the aid of power h) Promoting cooperative organisation among producers of husks coir fibre and coir yarn and manufacturers of coir products (i) Ensuring remunerative returns to producers of husks coir fibre and coir yarn and manufacturers of coir products j) Licensing of retting places and warehouses and otherwise regulating the stocking and sale of coir fibre coir yarn and coir products both for the internal market and for exports k) Advising on all matters relating to the development of the coir industryCOIR HOUSE M G Road Kochi-682 016 Tel 91-484-2351807 2351788 2351954 2354397 Fax 91-484-2370034 Gram COIRBOARD E-mail coirmd2vsnlnetin Web wwwcoirindiaorg wwwcoir-indiacom The Carpet Export Promotion Council of India

A responsible authority to enhance the utility of carpet industry

The Carpet Export Promotion Council Of India (CEPC) was set up by the Government Of India in 1982 with a view to promote the exports of hand knotted carpets and other floor coverings The council advises the government onxports promotion measures and helps the exporters community in bringing their problems and requirements to the notice of the government It provides expertise in many spheres both for the Indian exporters and foreign buyers The council is a high profile body consisting of senior Trade Representatives and Government officials It provides the necessary assistance to the Indian exporters It identifies the markets provides financial assistance sponsors participation in fairs and exhibitions and also conducts publicity abroad Regarding overseas buyersimporters the CEPC locates the estimate suppliers and provides credibility reports on Indian exporters It also arranges buyer-seller meets and assists in trade disputes To eradicate the incidence of child labour from the carpet industry CEPC has adopted a label KALEEN This KALEEN label on carpets ensures that no child labour has been used for the production of the carpet The exporters are required to fulfill certain prerequisites to obtain this label They have to contribute of the FOB value of their exports to the child welfare fund The main objectives of adopting this label are n Total eradication of child labour n Welfare of the weaver community n Education for the children with mid- day meal n Medicare of the weaver families n Vocational training for the children with assured stipendCARPET EXPORT PROMOTION COUNCIL 110-A1 Krishna Nagar Street No 5 Safdarjung Enclave New Delhi - 110029 India Tel +91-11-6101024 6102742 Telefax + 91-11-6165299 Email cepcndavsnlnetin Web Sites wwwindiancarpetscom wwwindia-carpetscom wwwindiancarpetsorg Apparel Export Promotion Council (AEPC)

14

The Apparel Export Promotion Council (AEPC) was incorporated under section 25 of the Companies Act 1956 on 22nd February 1978 The council carries out its function as a nodal agency sponsored by the Ministry of Textiles Govt of India It holds the dual responsibility of monitoring garment exports quotas and promotion of exports of readymade garments from India AEPC acts as a catalyst for the Indian Garment Exports It organizes the Buyer Seller Meets garment shows with sponsoring of the Trade Delegations and offers technical advice and market briefs etc It also provides service to its more than 35000 registered exporter members in a specialized manner through its committees and various sub-committees AEPCs Executive Committee functioned through its various Sub-Committees including Quota Advisory Committee Export Promotion Committee Exhibition Advisory Committee and Finance and Budget Sub Committee It organises variety of fairs including India and International Garment Fair twice a yearat Delhi India Knit Fair at Tripur the knitwear capital of India Mens Fashion Fair at Mumbai the commercial capital of India AEPC runs Apparel Training and Design Centres at places like Delhi Mumbai Tirupur Bangalore Chennai Jaipur and Hyderabad These centres impart training and thereafter even help the trained to get placed in various industries at shop-floor level to improve the efficiency and productivity of the Garment Industry AEPC also provides rich library to its members as well as research scholars Its grandiose project of a world class Trade Mart cum Exhibition Complex in Delhi is in the anvil It will house exclusive showrooms of exporters as much as hundred and an auditorium plus a permanent Exhibition Complex The council administers the Export Entitlement Policy of the Government of India It has also been authorized to allot quotas to exporters and issue Certificate Apparel Export Promotion Council (AEPC) NBCC Tower 15 Bhikaji Cama Place New Delhi- 110066 Tel 011-26108552 011-26183351 011- 26169356579394 Fax 011-26188300 011-26188584 Email hoadepdndavsnlnetinRegistered Office NBCC Tower 15 Bhikaji Cama Place New Delhi - 110066 Tel 011- 6183351 6169394 6169356 57 Fax 011- 61885846188300 E-mail aepch400nicgwnicin Internet wwwaepcindiacom Export Promotion Council For Handicrafts

Export Promotion Council for Handicrafts (EPCH) has been established under the Exim Policy of Govt of India in 1986-87 and is a non-profit organisation The organisation works under the administrative control of Oo Development Commissioner (Handicrafts) Ministry of Textiles Govt of India and governed by Policies of Ministry of Textiles It is an apex body which projects Indias image abroad as a reliable supplier of high quality of handicraft goods amp services It also insures various measures keeping in view of observance of international standards and specifications The Council has created necessary infrastructure as well as marketing and information facilities which are availed both by the member exporters and importers The membership of the council rose from 35 in year 1985-86 to 6873 in 2002-03 EPCH Council The Council is run and managed by team of professionals headed by Executive Director The Committee of Administration consist of eminent exporters professionals and senior Govt officials The Export Promotion Council for Handicrafts has a rarest distinction of being considered as MODEL COUNCIL which is self sustaining and where all the promotional activities are self financed Indian Handicrafts amp Gifts Fair Indian Handicrafts and Gifts Fair today has become a show window of Indian handicrafts among all the leading overseas buyers need no introductionFor further details contact Export Promotion Council For Handicrafts EPCH House Pocket-6 amp 7 Sector-C LSC Vasant Kunj New Delhi-110 070 India Tel 91-11-26135256(6 lines) Fax 91-11-2613551819 E-mail epchvsnlcom Website wwwepchcom

15

Q4 (a) Before commencement of any foreign trade the organizations have to procure the necessary lsquoCode Numberrsquo and licence Explain the entire procedures issue amp power of govt in relation to Code number amp Licence

Answer-

Importer Exporter Code Number

Definition of IEC Code

IEC Code is unique 10 digit code issued by DGFT ndash Director General of Foreign Trade Ministry of Commerce

Government of India to Indian Companies

Full form of IEC Code

Full From of IEC Code is ldquoImporter Exporter Code rdquo To import or export in India IEC Code is mandatory No

person or entity shall make any Import or Export without IEC Code Number

IEC Code No Notification

Directorate General of Foreign Trade(DGFT) issued a Policy Circular No15 (RE-2006)2004-2009 Date 27th July

2006) for New System for issuance of Importer-Exporter Code Number

Eligibility Legal Provisions and Conditions for IEC Code Number

Eligibility condition and Legal Provisions are given for IEC Code Number Application in Foreign Trade (Regulation)

Rules 1993 Ministry of Commerce Notification No GSR 791 (E) dated 30-12-1993

Application for Grant of IEC Number

An application for grant of IEC number shall be made by the RegisteredHead Office of the applicant and apply to the

nearest Regional Authority of Directorate General Foreign Trade the Registered office in case of company and Head

office in case of others falls in the lsquoAayaat Niryaat Form - ANF2Arsquo and shall be accompanied by documents

prescribed therein In case of STPI EHTP BTP units the Regional Offices of the DGFT having jurisdiction over the

district in which the Registered Head Office of the STPI unit is located shall issue or amend the IECs

Only one IEC would be issued against a single PAN number Any proprietor can have only one IEC number and in

case there are more than one IECs allotted to a proprietor the same may be surrendered to the Regional Office for

cancellation

16

IEC Code Online Application Form

The application can be download Form in PDF or Word This is called Aayaat Niryaat Form - ANF2A Along with

IEC Code Number Application Form it is necessary to submit

Appendix-18B Attested by Applicants Banker in his letter head with two passport size photo)

List Of Regional Authorities Of DGFT And The Corresponding Office of Reserve Bank Of India Exchange Control Department

You can find the list of Foreign Exchange Control Department of the RBI as given in

Appendix-18D

Validity of IEC Code No

An IEC number allotted to an applicant shall be valid for all its branchesdivisionsunitsfactories as indicated in the

format of IEC given in

Appendix- 18B

Duplicate Copy of IEC Number

Where an IEC Number is lost or misplaced the issuing authority may consider requests for grant of a duplicate copy of

IEC number if accompanied by an affidavit

Surrender of IEC Number

If an IEC holder does not wish to operate the allotted IEC number he may surrender the same by informing the issuing

authority On receipt of such intimation the issuing authority shall immediately cancel the same and electronically

transmit it to DGFT for onward transmission to the Customs and Regional Authorities

Application Fee For IEC Code Number

Application Fee Rs 25000

Mode of Payment

In Demand Draft of any Bank or Payment through EFT ( Electronic Fund Transfer by Nominated Bank by DGFT

Like HDFC Bank ICICI Bank State Bank of India UTI Bank Punjab National Bank Central Bank etc) or

Application fee can deposited by TR6 Challan with Duplicate Copy in any branch of Central Bank of India and TR6

Challan need to be submit along with IEC Code Application

Specified fee shall be paid for making an application under any provision of the

17

Policy and Handbook of Procedure Volume-I The scale of fee mode of payment procedure for refund of fee and the

categories of persons exempted from the payment of fee are contained in Appendix-21B

Territorial Jurisdiction of Regional Authorities

Every application unless otherwise specified shall be submitted to the Regional Authority of Directorate General

Foreign Trade as per the territorial jurisdiction of the Regional authorities indicated in

Policy and Handbook of Procedure Volume-I

Filing of Application

Application can be filed online in DGFT website details of online links are given below

Every application for an ImportExport licence certificate Authorisation permission or any other purpose should be

complete in all respects as required under the relevant provisions of the PolicyProcedures and shall be signed by the

applicant as defined in

paragraph 99 of the Policy An incomplete application is liable to be rejected giving specific reason for rejection

However in case of manual applications the applicant would furnish a soft copy of the application in MS word format

Profile of Importer Exporter

Each ImporterExporter shall be required to file importer exporter profile once with the Regional Authority in Part 1

of lsquoAayaat Niryaat Form - ANF2Arsquo Regional Authority shall enter the information furnished in Part 1 of lsquoAayaat

Niryaat Form ANF-2Arsquo in their database so as to dispense with the need for asking the repetitive information In case

of any change in the information given in Part 1 of lsquoAayaat Niryaat Form ANF-2Arsquo importerexporter shall intimate

the same to the Regional Authority

Self Addressed Stamped Envelope

The applicant shall furnish a self addressed envelope of 40 x 15 cm with postal stamp affixed on the envelope as

follows for all documents required to be sent by Speed Post

A Within local area Rs 2000

b Up to 200 Kms Rs 2500

c Between 200 to 1000 Kms Rs 3000

d Beyond 1000 Kms Rs 5000

18

IEC No Exempted Categories

The following categories of importers or exporters are exempted from obtaining Importer - Exporter Code (IEC)

number

1 Importers covered by clause 3 (1) [except sub-clauses (e) and (l)] and exporters covered by clause 3(2) [except sub-

clauses (i) and (k)] of the Foreign Trade (Exemption from application of Rules in certain cases) Order 1993

2 MinistriesDepartments of the Central or State Government

3 Persons importing or exporting goods for personal use not connected with trade or manufacture or agriculture

4 Persons importingexporting goods fromto Nepal provided the CIF value of a single consignment does not exceed

Indian Rs25000

5 Persons importingexporting goods fromto Myanmar through Indo-Myanmar border areas provided the CIF value of a

single consignment does not exceed Indian Rs25000

However the exemption from obtaining Importer-Exporter Code (IEC) number shall not be applicable for the export of

Special Chemicals Organisms Materials Equipments and Technologies (SCOMET) as listed in Appendix- 3

Schedule 2 of the ITC(HS) except in the case of exports by category(ii) above

6 The following permanent IEC numbers shall be used by the categories of importers exporters mentioned against them

for import export purposes

SNo Code Number Categories of Importers Exporters

1 0100000011 All Ministries Departments of Central Government and agencies

wholly or partially owned by them

2 0100000029 All Ministries Departments of any State Government and agencies

3 0100000037Diplomatic personnel Counselor officers in India and officials of

UNO and its specialised agencies

4 0100000045 Indians returning from going abroad and claiming benefit under

19

Baggage Rules

5 0100000053Persons Institutions Hospitals importing or exporting goods for

personnel use not connected with trade or manufacture or agriculture

6 0100000061 Persons importing exporting goods from to Nepal

7 0100000070Persons importing exporting goods from to Myanmar through

Indo-Myanmar border areas

8 0100000088 Ford Foundation

9 0100000096

Importers importing goods for display or use

in fairs exhibitions or similarevents under provisions of ATA carnet This IEC number can

also be used byimporters importing for exhibitionsfairs as per Para 229 of HBPv1

100100000100 Director National Blood Group Reference Laboratory Bombay or their

authorized offices

110100000126

Individuals Charitable Institution Registered NGOs importing

goods

which have been exempted from Customs duty under Notification issued by

Ministry of Finance for bonafide use by victims affected by natural

calamity

120100000134

Persons importing exporting permissiblegoods as notified from time to time from to China

through GunjiNamgaya Shipkila and Nathula ports subject to value ceilings of single

consignment as given in Para 28(iv) above

20

130100000169 Non-commercial imports and exports by entities that have been

authorized by Reserve Bank of India

Note Commercial Public Sector Undertaking (PSU) who have obtained PAN will however be required to obtain

Importer Exporter Code number The permanent IEC number as mentioned above shall be used by non-commercial

PSUs

Guidelines for Application of IEC Code Number

Mandatory Requirements to apply for IEC Code Number

7 PAN Number

8 Current Bank Account

9 Bankers Certificate

10 IEC Code Number

Application Fee

Rs 25000

(Expert TIP Pay via EFT (Electronic Fund Transfer ) and submit IEC Online Application form If you wish to

receive IEC Number instantly)

11 The physical application containing required documents should reach DGFT RLA concerned within 15 days of its

online submission

12 E-mail is not mandatory If it is provided it will facilitate faster communication

Check List of Documents to apply for IEC Code

13 Covering Letter on your companys letter head for issue of new IEC Code Number

14 Two copies of the application in prescribed format must be submitted to your regional JtDGFT Office

15 Each individual page of the application has to be signed by the applicant

16 Part 1 amp Part 4 has to be filled in by all applicants In case of applications submitted electronically

17 No hard copies of Part 1 may be submitted However in cases where applications are submitted otherwise hard copy of

Part 1has to be submitted

18 Only relevant portions of Part 2 need to be filled in

19 Rs 25000 Bank Receipt (in duplicate)Demand DraftEFT details evidencing payment of application fee in terms of

20 Certificate from the Banker of the applicant firm in the format given in

21 Self certified copy of PAN issuing letter or PAN (Permanent Account Number) Card issued by Income Tax Authority

22 Two copies of passport size photographs of the applicant duly attested by the Banker of the applicant

23 Self addresses envelope with Rs25- postal stamp for delivery of IEC certificate by registered post or challanDD of

Rs100- for speed post FAQrsquos

21

1) What is an IEC Certificate and who can procure it

a IEC stand for Import Export Code Certificate issued by the Director General of Foreign trade registering an individual firm organization entity etc as an Exporter or Importer

b An IEC can be obtained by any PAN Holder desirous of conducting Exports or Imports

2) What is the tenure of an IEC

a An IEC once issued is permanent in nature till the same is surrendered by the IEC holder or cancelled by the Licencing Authority upon any default made be the IEC holder

3) How often is the IEC required to be updated

a An IEC once issued needs to be updated within 90 days in the case of the following

1 If there is any change in the 1 Name of the IEC holder2 Address of Registered Branch office Factory address3 Constitution viz Change in Directors conversion from Proprietorship concern to Firm Firm to Company Pvt Ltd to

Public Ltd change in Bank details etc4 PAN Details of the IEC holder2 Any change is required by the Government for moving towards an Integrated One Number Regime

b Upon the change being intimated beyond a period of 90 days the changes shall be registered by the RLA upon payment of a penalty

Q4 (b) Under Foreign Trade (Regulation) Rules 1993 explain the conditions which must be satisfied by an Industry for issue of a Licence Also mention the Conditions under which govt can lsquorefusersquo the licence

Answer-

FOREIGN TRADE (REGULATION) RULES 1993

Act In exercise of the powers conferred by section 19 of the Foreign Trade (Development and Regulation) Act 1992 (22 of 1992) the Central Government hereby makes the following rules namely -

1 Short title and commencement (1) These rules may be called the Foreign Trade (Regulation) Rules 1993

(2) They shall come into force on the date of their publication in the Official Gazette

2 DefinitionsIn these rules unless the context otherwise requires-

(a) Act means the Foreign Trade (Development and Regulation) Act 1992 (22 of 1992)

(b) charitable purpose includes relief of the poor education medical relief and the advancement of any other object of 22

general public utility

(c) importer or exporter means a person who imports or exports goods and holds a valid Importer-Exporter Code Number granted under section 7

(d) licensing authority means an authority authorised by the Director-General under sub-section (2) of section 9 to grant or renew a licence under these rules

(e) policy means the export and import policy formulated and announced by the Central Government under section 5

(f) Schedule means a Schedule appended to these rules

(g) section means a section of the Act

(h) special licence means a licence granted under sub-section (2) of section 8

(i) value has the meaning assigned to it in clause (41) of section 2 of the Customs Act 1962 (52 of 1962)

(j) words and expressions used in these rules and not defined but defined in the Act shall have the meanings respectively assigned to them in the Act

3 Grant of special licence(1) Where the Importer-Exporter Code Number granted to any person has been suspended or cancelled under sub-section (1) of section 8 the Director-General may having regard to the following factors grant to him a special licence namely-

(1) that the denial of a special licence is likely to affect the foreign trade of India adversely or

(2) that the suspension or cancellation of the Importer-Exporter Code Number is likely to lead to non-fulfilment of any obligation by India under any international agreement

(2) The special licence granted to any person under sub-rule (1) shall be non-transferable

4 Application for grant of licencesA person may make an application for the grant of a licence to import or export goods in accordance with the provisions of the policy or an order made under section 3

5 Fee (1) Every application for a licence to import shall be accompanied by the fee specified in the Schedule

(2) The mode of deposit of fee shall be as specified in the Schedule

(3) No fee shall be payable in respect of any application made by

(a) the Central Government a State Government a State Government or any department or any office of the Government

(b) any local authority for the bona fide import of goods required by it for official use

(c) any institution set up for educational charitable or missionary purposes for the import of goods required for its use

(d) an applicant for the import of any goods (other than a vehicle) if the import of the goods is for his personal use which is not connected with trade or manufacture

(4) The fee once received will not be refunded except in the following circumstances namely-23

(i) where the fee has been deposited in excess of the specified scale of fee or

(ii) where the fee has been deposited but no application has been made or

(iii) where the fee has been deposited in error but the applicant is exempt from payment of fee

6 Conditions of licence(1) It shall be deemed to be a condition of every licence for export that

(i) no person shall transfer or acquire by transfer any licence issued by the licensing authority except in accordance with the provisions of the policy

(ii) the goods for the export of which the licence is granted shall be the property of the licensee at the time of the export

(2) The licensing authority may issue a licence for import subject to one or more of the following conditions namely-

(a) that the goods covered by the licence shall not be disposed of except in accordance with the provisions of the policy or in the manner specified by the licensing authority in the licence

(b) that the applicant for a licence shall execute a bond for complying with the terms and conditions of the licence

(3) It shall be deemed to be a condition of every licence for import that-

(a) no person shall transfer or acquire by transfer any licence issued by the licensing authority except in accordance with the provisions of the policy

(b) the goods for the import of which a licence is granted shall be the property of the licensee at the time of import and up to the time of clearance through customs

(c) the goods for the import of which a licence is granted shall be new goods unless otherwise stated in the licence

(d) that the goods covered by the licence for import shall not be exported without the written permission of the Director-General

(4) Any person importing goods from the United States of America in accordance with the terms of the Indo-US Memorandum of Understanding on Technology Transfer shall also comply with all the conditions and assurances specified in the import certificate issued in terms of such Memorandum and such other assurances given by the person importing those goods to the Government of the United States of America through the Government of India

7 Refusal of licence(1) The Director-General or the licensing authority may for reasons to be recorded in writing refuse to grant or renew a licence if-

(a) the applicant has contravened any law relating to customs or foreign exchange

(b) the application for the licence does not substantially conform to any provision of these rules

(c) the application or any document used in support thereof contains any false or fraudulent or misleading statement

(d) it has been decided by the Central Government to canalise the export or import of goods and distribution thereof as the case may be through special or specialised agencies

(e) any action against the applicant is for the time being pending under the Act or Rules and orders made thereunder24

(f) the applicant is or was a managing partner in a partnership firm or is or was a director of a private limited company having a controlling interest against which any action is for the time being pending under the Act or Rules and orders made thereunder

(g) the applicant fails to pay any penalty imposed on him under the Act

(h) the applicant has tampered with a licence

(i) the applicant or any agent or employee of the applicant with his consent has been a party to any corrupt or fraudulent practice for the purposes of obtaining any other licence

(j) the applicant is not eligible for a licence in accordance with any provision of the policy

(k) the applicant fails to produce any documents called for by the Director-General or the licensing authority

(l) in the case of a licence for import no foreign exchange is available for the purpose

(m) the application has been signed by a person other than a person duly authorised by the applicant under the provisions of the policy

(n) the applicant has attempted to obtain or has obtained cash compensatory support duty drawback cash assistance benefits allowed to registered exporters or any other similar benefits from the Central Government or any agency authorised by the Central Government in relation to exports made by him on the basis of any false fraudulent or misleading statement or any document which is false or fabricated or tampered with

(2) The refusal of a licence under sub-rule (1) shall be without prejudice to any other action that may be taken against an applicant by the licensing authority under the Act

8 Amendment of licenceThe licensing authority may of its own motion or on an application by the licensee amend any licence in such manner as may be necessary or to rectify any error or omission in the licence

9 Suspension of a licence(1) The Director-General or the licensing authority may by an order in writing suspend the operation of a licence granted to-

(a) any person if an order of detention has been made against such person under the provisions of the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act 1974 (52 of 1974) or

(b) a partnership firm or a private limited company if the person referred to in clause (a) is a partner or a whole-time director or managing director as the case may be of such firm or company

PROVIDED that the order of suspension shall cease to have effect in respect of the aforesaid person or as the case may be the partnership-firm or company when the order of detention made against such person-

(i) being an order of detention to which the provisions of section 9 of the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act 1974 (52 of 1974) do not apply has been revoked on the report of the Advisory Board under section 8 of that Act or before receipt of the report of the Advisory Board or before making a reference to the Advisory Board or

(ii) being an order of detention to which the provisions of section 9 of the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act 1974 (52 of 1974) apply has been revoked on the report of the Advisory Board under section 8 read with sub-section (2) of section 9 of that Act or before receipt of such report

25

(iii) has been set aside by a court of competent jurisdiction

(2) The Director-General or the licensing authority may by an order in writing suspend the operation of any licence granted under these rules where proceedings for cancellation of such licence have been initiated under rule 10

10 Cancellation of a licenceThe Director-General or the licensing authority may by an order in writing cancel any licence granted under these rules if-

(a) the licence has been obtained by fraud suppression of facts or misrepresentation or

(b the licensee has committed a breach of any of the conditions of the licence or

(c) the licensee has tampered with the licence in any manner or

(d) the licensee has contravened any law relating to customs or foreign exchange or the rules and regulations relating thereto

11 Declaration as to value and quality of imported goodsOn the importation into or exportation out of any customs ports of any goods whether liable to duty or not the owner of such goods shall in the bill of entry or the shipping bill or any other documents prescribed under the Customs Act 1962 state the value quality and description of such goods to the best of his knowledge and belief and in case of exportation of goods certify that the quality and specification of the goods as stated in those documents are in accordance with the terms of the export contract entered into with the buyer or consignee in pursuance of which the goods are being exported and shall subscribe to a declaration of the truth of such statement at the foot of such bill of entry or shipping bill or any other documents

12 Declaration as to importer-exporter code numberOn the importation into or exportation out of any customs port of any goods the importer or exporter shall in the bill of entry or shipping bill or as the case may be in any other documents prescribed by rules made under the Act or the Customs Act 1962 (52 of 1962) state the importer-exporter code number allotted to him by the Competent Authority

13 Utilization of imported goods (1) No person shall use any imported goods allotted to him by the State Trading Corporation of India or any other agency recognised by the Central Government in a manner and for the purpose otherwise than as declared by him in his application for such allotment or in any document submitted by him in support of such application

(2) No person shall dispose of any goods imported by him against a licence except in accordance with the terms and conditions of such licence

14 Prohibition regarding making signing of any declaration statement or documents (1) No person shall make sign or use or cause to be made signed or used any declaration statement or document for the purposes of obtaining a licence or importing any goods knowing or having reason to believe that such declaration statement or document is false in any material particular

(2) No person shall employ any corrupt or fraudulent practice for the purposes of obtaining any licence or importing or exporting any goods

15 Power to enter premises and inspect search and seize goods documents things and conveyances(1) Any person authorized by the Central Government under sub-section (1) of section 10 (hereinafter called the authorized person) may at any reasonable time enter any premises in which-

(i) any imported goods or materials which are liable to confiscation under the provisions of the Act or

(ii) any books of account or documents or things which in his opinion will be useful for or relevant to any 26

proceedings under the Act are suspected to have been kept or concealed and may inspect such goods materials books of account documents or things and may take such notes or extracts there from as he may think fit

(2) If the authorized person has reason to believe that-

(i) any imported goods or materials liable to confiscation under the Act or

(ii) any books of account or documents or things which in his opinion will be useful for or relevant to any proceedings under the Act are secreted in any premises he may enter into and search such premises for such goods materials books of account documents or things

(3) (a) If the authorized person has reason to believe that any imported goods or materials are liable to confiscation under the Act he may seize such goods or materials together with the package covering or receptacle if any in which such goods or materials are found to have been mixed with any other goods or materials

PROVIDED that where it is not practicable to seize any such goods or materials the authorised person may serve on the owner of the goods or materials an order that he shall not remove part with or otherwise deal with the goods or materials except with the previous permission of the authorised person

(b) Where any goods or materials are seized under clause (a) and no notice in respect thereof is given within six months of the seizure of the goods or materials the goods or materials shall be returned to the person from whose possession they were seized

PROVIDED that the aforesaid period of six months may on sufficient cause being shown be extended by the Director-General for a further period not exceeding six months

(c) The authorised person may seize any books of account or documents or things which in his opinion will be useful for or relevant to any proceedings under the Act

(d) The person from whose custody any documents are seized under this sub-rule shall be entitled to make copies thereof or take extracts therefrom in the presence of the authorised person

(e) If any person legally entitled to the books of account or other documents or things seized under this sub-rule objects for any reason to the retention by the authorised person of the books of account or the documents or things he may move an application to the Central Government stating therein the reasons for such objection request for the return of the books of account or documents or things

(f) On receipt of the application under clause (e) the Central Government may after giving the applicant an opportunity of being heard pass such order as it may think fit

(g) Where any document is produced or furnished by any person or has been seized from the custody or control of any person under the Act or has been received from any place outside India in the course of the investigation for any contravention referred to in section 11 by any person and such document is tendered in evidence against the person by whom it is produced or from whom it was seized or against such person or any other person who is jointly proceeded against the adjudicating authority shall notwithstanding anything to the contrary contained in any other law for the time being in force-

(i) presume unless the contrary is proved that the signature and every other part of such document which purports to be in the handwriting of any particular person of which the adjudicating authority may reasonably assume to have been signed by or to be in the handwriting of any particular person is under the person$s handwriting and in the case of a document executed or attested it was executed or attested by the person by whom it purports to have been so executed or attested

(ii) admit the document in evidence notwithstanding that it is not duly stamped if such document is otherwise admissible in evidence

27

(4) The authorised person may if he has reason to suspect that any conveyance or animal is being or is about to be used for the transportation of any imported goods or material which are liable to confiscation under the Act and that by such transportation any provision of the Act has been is being or is about to be contravened at any time stop such conveyance or animal or in the case of aircraft compel it to land and-

(a) rummage and search the conveyance or any part thereof

(b) examine and search any goods or material in the conveyance or on the animal

(c) if it becomes necessary to stop any conveyance or animal he may use all lawful means for stopping it and where such means fail the conveyance or animal may be fired upon and where he is satisfied that it is necessary so to do to prevent the contravention of any provision of the Act or of the rules and orders made thereunder or the policy or condition of any licence he may seize such conveyance or animal

Explanation Any reference in this rule to a conveyance shall unless the context otherwise requires be construed as including a reference to an aircraft vehicle or vessel

16 Settlement(1) The adjudicating authority may determine the amount of settlement to be paid by the person to whom a notice has been issued and who has opted for settlement and has admitted the contravention specified in the notice in the following cases namely-

(i) where it is of the opinion that the contravention of any provision of the Act or these rules or the policy has been made without mens rea or without wilful mistake or without suppression of facts or without any collusion or without fraud and forgery or without an intent to cause loss of foreign exchange or

(ii) Where the person importing the goods has not met the requirements of the actual user conditions as specified in the policy and has not misutilised the said imported goods or

(iii) where the person importing the goods has not fulfilled the export obligation and has not misutilised the said imported goods

(2) Where a person has opted for settlement under sub-rule (1) the settlement made by the adjudicating authority shall be final

17 Confiscation and redemption

(1) Any imported goods or materials in respect of which-

(a) any condition of the licence or letter of authority under which they were imported relating to their utilisation or distribution or

(b) any condition relating to their utilisation or distribution subject to which they were received from or through an agency recognised by the Central Government or

(c) any condition imposed under the policy with regard to the sale or disposal of such goods or materials

has been is being or is attempted to be contravened shall together with any package covering or receptacle in which such goods are found be liable to be confiscated by the adjudicating authority and where such goods or materials are so mixed with any other goods or materials that they cannot be readily separated such other goods or materials shall also be liable to be so confiscated

PROVIDED that where it is established to the satisfaction of the adjudicating authority that any goods or materials which are liable to confiscation under this rule had been imported for personal use and not for any trade or industry

28

such goods or materials shall not be ordered to be confiscated

(2) The adjudicating authority may permit the redemption of the confiscated goods or materials upon payment of redemption charges equivalent to the market value of such goods or materials

18 Confiscation of conveyance(1) Any conveyance or animal which has been is being or is attempted to be used for the transport of any goods or materials that are imported and which are liable to confiscation under rule 17 shall be liable to be confiscated by the adjudicating authority unless the owner of the conveyance or animal proves that it was is being or is about to be so used without the knowledge or connivance of the owner himself his agent if any and the person in charge of the conveyance or animal and that each of them had taken all reasonable precautions against such use

(2) The adjudicating authority shall permit redemption of the confiscated conveyance or animal used for the transport of goods or passengers for hire upon payment of redemption charges equivalent to the market value of such conveyance or animal

SCHEDULEThe following fee shall be leviable in respect of the application for an import licence etc

SCALE OF FEE

SNo Particulars Amount of fee (1) (2) (3) 1 Where the value of goods specified in application does not exceed rupees fifty thousand Rupees two hundred 2 Where the value of the goods specified in the application exceeds rupees fifty thousand but not exceed rupees one crore Rupees two per thousand or part thereof subject to a minimum of rupees two hundred 3 Where the value of the goods specified in the application exceeds rupees one crore Rupees two per thousand or part thereof subject to a maximum of rupees one lakh and fifty thousand 4 Application for grant of duplicate licence Rupees two hundred 5 In case where import licence and other correspondence are required by speed post Rupees two hundred 6 Application for issue of an identity card Rupees two thousand 7 Application for issue of duplicate identity card in the event of loss of original card Rupees one hundred 8 Extension of the period of shipment of an import licence Rupees two hundred 9 Application for grant of split-up licences Rupees one thousand per split-up licence

Q6 SHORT NOTES

Answer

6(a) Duty Exemption remission schemes

The Duty Exemption Scheme enables import of inputs required for export production The Duty Remission Scheme enables post export replenishment remission of duty on inputs used in the export product

An Advance Licence is issued under Duty Exemption Scheme to allow import of inputs which are physically incorporated in the export product (making normal allowance for wastage) In addition fuel oil energy catalysts etc which are consumed in the course of their use to obtain the export product may also be allowed under the scheme Advance Licence can be issued for-

a Physical exports

29

b Intermediate supplies c Deemed exportsd For physical exports Advance Licence can also be issued on the basis of annual requirement in respect of

export products for which SIONs have been notified e Duty Remission Scheme consists of (a) Duty Free Replenishment Certificate and (b)Duty Entitlement

Passbook Scheme The scheme allows drawback of import charges on inputs used in the export product (making normal allowance for the wastage)

The Duty Exemption Scheme enables duty free import of inputs required for export production An Advance Licence is issued under Duty Exemption Scheme The Duty Remission Scheme enables post export replenishment remission of duty on inputs used in the export product Duty Remission scheme consist of (a) DFRC and (b) DEPB DFRC permits duty free replenishment used in the export product The DEPB scheme allows drawback of import charges on inputs used in the export product

6 (c) Deemed Exports

A deemed export release in the United States is a release of technology or source code that is subject to the Export Administration Regulations to a foreign national Such release is deemed to be an export to the home country or countries of the foreign national

lsquoDeemed Exportsrsquo as defined in the Export and Import Polilcy 1997-2002 means those transactions in which the goods supplied do not leave the country and the supplier in India receives the payment for the goods It means the goods supplied need not go out of India to treat them as lsquoDeemed Exportrsquo

The following categories of supply of goods by the main sub-contractors shall be regarded as Deemed Exports under this Policy provided the goods are manufactured in India

1 Supply of goods against Advance LicenceDFRC under the Duty Exemption Remission Scheme2 Supply of goods to Export Oriented Units (EOUs) or units located in Export Processing Zones (EPZs) or Special

Economic Zone (SEZs) or Software Technology Parks (STPs) or to Electronic Hardware Technology Parks (EHTPs)3 Supply of capital goods to holders of licences under the Export Promotion Capital Goods (EPCG) scheme4 supply of goods to projects financed by multilateral or bilateral agenciesfunds as notified by the Department of

Economic Affairs Ministry of Finance under International Competitive Bidding in accordance with the procedures of those agencies funds where the legal agreements provide for tender evaluation without including the customs duty

5 supply of capital goods including in unassembled disassembled condition as well as plants machinery accessories tools dies and such goods which are used for installation purposes till the stage of commercial production and spares to the extent of 10 of the FOR value to fertiliser plants

6 supply of goods to any project or purpose in respect of which the Ministry of Finance by a notification permits the import of such goods at zero customs duty coupled with the extension of benefits under this chapter to domestic supplies

7 Supply of goods to the power and refineries not covered in (6) above8 Supply of marine freight containers by 100 EOU (Domestic freight containersndashmanufacturers) provided the said

containers are exported out of India within 6 months or such further period as permitted by the Customs

6 (d) Dimond amp Jewellery Dollar Account

Firms and companies dealing in the purchasesale of rough or cut and polished diamondsdiamond studded jewellery with a track record of at least 3 years in import or export of diamonds diamond studded jewellery and having an

30

average annual turnover of Rs 5 crore or above during preceding three licensing years may also carry out their business through designated Diamond Dollar Accounts The Diamond Dollar Account Scheme shall operate under the current licensing scheme of this chapter This scheme shall be optional and those importersexporters who wish to continue to use Rupee Accounts shall be allowed to do so under the existing policies Dollars in such accounts available from bank finance andor export proceeds shall be used only for (i) importpurchase of rough diamonds from overseaslocal sources (ii) purchase of cut and polished diamonds from local sources (iii) importpurchase of gold from overseasnominated agencies and repayment of dollar loans from the bank and (iv) transfer to the Rupee Account of the exporter Details of this Diamond Dollar Accounts Scheme (DDAS) are Provided

The procedure outlined shall also apply to diamond studded jewellery A non DDA holder is also permitted to supply cut and polished diamonds to DDA holder receive payment in dollars and convert same into rupees within the period of 7 days and the cut and polished diamonds so supplied by non-DDA holder will also be counted towards the discharge of his export obligation andor entitled him to replenishment licence as the case may be

6 (f) Appeal and Revision

Appeal-

1 If an importer is aggrieved by the decision of the inspection Authority regarding the destruction of any plant population he may prefer an appeal to the Plant Protection Adviser within seven days from the date of communication of the decision giving the grounds of such appeal

2 It shall be lawful for the Plant Protection Adviser to rely on the observations of the Inspection Authority and such other expert opinion as he may deem necessary for deciding the appeal

3 The memorandum of appeal under sub-clause (1) shall set out the grounds in successive paragraphs on which the decision is challenged and shall be accompanied by a bank draft drawn in favour of the Plant Protection Adviser and payable at Faridabad evidencing the payment of a fee of Rs 100-

Revision-

The Plant Protection Adviser may at any time call for the records relating to any case pending before the inspection Authority for the purpose of satisfying itself as to the legality or propriety of any decision passed by that Authority and may pass such order in relation thereto as it thinks fit

6 (b) DTA Sales

ldquoDomestic tariff areardquo means an area within India but does not include special economic zones

To help special economic zones (SEZs) absorb global economic shocks the government plans to allow them to make available their excess installed capacities for the use of industrial consumers in the domestic tariff area (DTA) The idea is to ensure that industrial capacities built up in SEZs donrsquot remain idle in case another global slowdown occurs and dry up export demand Of course such contract manufacturing by SEZs would be bereft of any tax relief

The move follows the reports that several SEZ developers are planning to exit due to weak demand in overseas markets consequent to the economic crisis

A set of amendments to the SEZ Rules on the cards would also include fixing time lines for development of the zones and a reduction in the mandatory minimum area for farm SEZs from 100 to 40 hectares official sources told FE

Scores of SEZs have been hit by the global crisis At the last count 12 developers have sought an exit and nine of them have got the Board of Approval nod for that The Essar group which has almost built a steel SEZ at Hazira is among those who want to shed the SEZ tag

31

The present norms mandate that SEZs can take orders from Indian companies located outside the zones (DTA) only if they are for exports The proposed rules would allow SEZs to take up orders from any Indian firm located outside The idea is to let SEZ units use their excess manufacturing capacity to process orders from companies located outside the zones

Experts believe that the move will give domestic companies access to state-of-the-art machinery in the zones

ldquoSEZs will be able to provide manufacturing services to DTA units It will help the zones to achieve economies of scalerdquo said Tapan Sangal senor manager PricewaterhouseCoopers

To ensure that there is no loss to the exchequer the DTA unit will have to provide the SEZ with the required raw material finished goods and other consumables The SEZ units will do the value addition a kind of contract manufacturing and return the finished goods to the DTA firm Prior government permission is required for taking such orders

The move will not impact the net foreign exchange commitments of the zonesmdashearnings from exports will have to be more than imports in a block of five years ldquoThere will not be any loss to the exchequer as all inputs will be provided by the DTA unit And since goods supplied by DTA units to SEZs for processing is not an import there would not be any need to achieve net foreign exchange surplus for such ordersrdquo said SEZ expert Hitender Mehta head Vaish Associates Gurgaon

Explaining the proposed amendment a commerce ministry communique to SEZ developers said ldquoThe present amendment has been proposed with a view to effectively utilise the installed capacities in the SEZs especially in times of economic downturn and also to help the DTA units to get the benefit of value addition as would have obtained from overseasrdquo The proposed amendments will be notified after comments are received from the SEZs

The proposed amendments also intend to erase some policy grey areas and clear some bottlenecks For instance the proposed amendments seek to provide a 10-year timeline for development of the minimum built up area of the zone Moreover it also says that the developer of the SEZ should get at least one unit approved in the zone within three years of getting the green signal The present guidelines only say that a developer has to take lsquoeffectiversquo steps to implement the approval within three years

32

INTRODUCTION -
MEANING-
- IMPLICATIONS OF THE EXIM POLICY 1997 ndash2002
- Definition of IEC Code
- Full form of IEC Code
- IEC Code No Notification
- Eligibility Legal Provisions and Conditions for IEC Code Number
- Application for Grant of IEC Number
- IEC Code Online Application Form
- List Of Regional Authorities Of DGFT And The Corresponding Office of Reserve Bank Of India Exchange Control Department
- Validity of IEC Code No
- Duplicate Copy of IEC Number
- Surrender of IEC Number
- Application Fee For IEC Code Number
- Territorial Jurisdiction of Regional Authorities
- Filing of Application
- Profile of Importer Exporter
- Self Addressed Stamped Envelope
- IEC No Exempted Categories
- Guidelines for Application of IEC Code Number
- - Mandatory Requirements to apply for IEC Code Number
  - Check List of Documents to apply for IEC Code