Enabling provisions for import of inputs that are subjected to mandatory Quality Control Orders (QCOs) by Advance Authorisation holders and EOU – Notification No. 69 /2023
1. S.O. (E) In exercise of powers conferred by Section 3 read with Section 5 of the Foreign Trade (Development & Regulation) Act, 1992 (No. 22 oY 1992), as amended, read with Para 1.02, 2.01 and 2.03 of the Foreign I rade Policy (FTP), 2023, the Central Government hereby makes the following amendments to FTP, 2023.
2. Below para 4.18 of FTP 2023, a new para 4.18 (A) is inserted as follows:
“4.18A Importability of items under Advance Authorisation without mandatory Quality Control Orders (QCOs)
Import of Inputs under Advance Authorisation, without compliance to the mandatory QCOs, shall be subjected to the following conditions:
(i) Import of inputs under the Advance authorisation without compliance to the mandatory QCOs shall be with pre-import condition. Such inputs shall be utilised in the manufacturing of the export product (making normal allowance for wastage) and shall be exported under the same authorisation.
(ii) Exemption from mandatory QCOs shall be specifically endorsed in the Advance authorisation, upon the request of the authorisation holder. Imports under Authorisation without specific endorsement of exemption shall be made in accordance with mandatory QCOs.
(iii) Any unutiliscd imports or the products manufactured with inputs imported without compliance to the mandatory QCOs, shall not be transferred to DTA, even after regularisation of default in fulfilment of export obligation. For the purpose of this para, unutilised imports means imported inputs (without compliance of mandatory QCOs) which have not been accounted for, as per SION/Ad-hoc Norms, in the product exported under the same authorisation.
(iv)The unutilised imports shall be regularised as follows
a. The unutilised material shall be destroyed in the presence of jurisdictional GST/Customs authorities who shall certify the destruction of the goods or same may be re-exported; and in addition
b. The AA holder shall pay duties/taxes/cesses exempted along with interest on the unutilsed exempted material to Customs Authorities plus composition fee of an amount equivalent to 10% of the CIF value of unutilized imported inputs to DGFT. Proof thereof shall be submitted to the RA concerned before grant of EODC.
(v) The exemption from QCO will be available for physical exports only and such exemption will not be allowed for deemed exports for Advance Authorisation Holders.
(vi) The facility of clubbing under para 4.36 of Handbook of Procedures (HBP), 2023 shall not be available
(vii) The EO period for such authorizations shall be as per para 4.40 of Handbook of Procedures.
(viii) This exemption is further subjected to para 2.03 (c) of FTP.
3. The following sub-para is appended to the existing para 4.24 of FTP 2023:
“(d) Import of Inputs without compliance to the mandatory QCOs under DFIA scheme is not allowed.”
4. The following sub-para is appended to the existing para 6.07 of FTP 2023:
“(k) Exemption from applicability of mandatory Quality Control Orders (QCOs) issued under the BIS Act, 2016, shall be provided to EOU on import of inputs which are required for export production. An undertaking to that effect will be submitted to the Customs authorities by the EOU at the time of importation and a copy of the same shall also be submitted to the Development Commissioner concerned. No DTA clearance of such inputs or goods manufactured made out of such inputs, are allowed. The exemption from QCO w’ill be available for physical exports only and such exemption will not be allowed for deemed exports. This exemption is further subjected to para 2.03 (c) of FTP.”
5. The following sub-para is appended to the existing para 2.03 of FTP 2023:
(c) The list of Ministries/Departments whose notifications on mandatory QCOs, that are exempted by the DGFT for goods to be utilised/consumed in manufacture of export products, are given in Appendix-2Y of FTP 2023.
Effect of this Notification: Enabling provisions are made for exempting inputs imported by Advance Authorisation holders and EOUs, from mandatory Quality Control Orders (QCOs) Accordingly, list of Ministries / Departments ( i.e. Ministry of Steel and Department for Promotion of Industry and Internal Trade (DPIIT) are notified in Appendix 2Y of FTP, 2023.
This issue with the approval of Minister of Commerce & Industry.
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