The
Indian businessman was facing global competition and the new trade
policy made the external trade very liberal. As a result to earn more
foreign exchange many Indian companies joined the export business and
got lot of success in that. Many companies increased their turnover
more than double by starting export division. For example, the
Reliance Company, Videocon, MRF, Ceat Tires, etc. got a great hold in
the export market.
Q
8. (a) What are the objectives of EXIM policy 2002 – 07? Explain
its main provisions.
The
principal objectives of this EXIM policy 2002 – 07 are:
(i)
To facilitate sustained growth in exports to attain a share of at
least 1% of global merchandise trade.
(ii)
To stimulate sustained economic growth by providing access to
essential raw materials, intermediates, components, consumables and
capital goods required for augmenting production and providing
services.
(iii)
To enhance the technological strength and efficiency of Indian
agriculture, industry and services, thereby improving their
competitive strength while generating new employment opportunities,
and to encourage the attainment of internationally accepted standards
of quality.
(iv)
To provide consumers with good quality goods and services at
internationally competitive prices while at the same time creating a
level playing field for the domestic producers.
GENERAL
PROVISIONS REGARDING IMPORTS AND EXPORTS
Exports
and Imports free unless regulated
2.1
Exports and Imports shall be free, except in cases where they are
regulated by the provisions of this Policy or any other law for the
time being in force. The item wise export and import policy shall be,
as specified in ITC(HS) published and notified by Director General of
Foreign Trade, as amended from time to time.
Compliance
with Laws
2.2
Every exporter or importer shall comply with the provisions of the
Foreign Trade (Development and Regulation) Act, 1992, the Rules and
Orders made thereunder, the provisions of this Policy and the terms
and conditions of any licence/certificate/permission granted to him,
as well as provisions of any other law for the time being in force.
All imported goods shall also be subject to domestic Laws, Rules,
Orders, Regulations, technical specifications, environmental and
safety norms as applicable to domestically produced goods.
Interpretation
of Policy
If
any question or doubt arises in respect of the interpretation of any
provision contained in this Policy, or regarding the classification
of any item in the ITC(HS) or Handbook (Vol.1) or Handbook (Vol.2),
the said question or doubt shall be referred to the Director General
of Foreign Trade whose decision thereon shall be final and binding.
If
any question or doubt arises whether a licence/
certificate/permission has been issued in accordance with this Policy
or if any question or doubt arises touching upon the scope and
content of such documents, the same shall be referred to the Director
General of Foreign Trade whose decision thereon shall be final and
binding.
Procedure
The
Director General of Foreign Trade may, in any case or class of cases,
specify the procedure to be followed by an exporter or importer or by
any licensing or any other competent authority for the purpose of
implementing the provisions of the Act, the Rules and the Orders made
thereunder and this Policy. Such procedures shall be included in the
Handbook (Vol.1), Handbook (Vol.2) and in ITC(HS) and published by
means of a Public Notice. Such procedures may, in like manner, be
amended from time to time.
The
Handbook (Vol.1) is a supplement to the EXIM Policy and contains
relevant procedures and other details. The benefits available under
various schemes of the Policy are given in the Handbook (Vol.1).
Exemption
from Policy/ Procedure
Any
request for relaxation of the provisions of this Policy or of any
procedure, on the ground that there is genuine hardship to the
applicant or that a strict application of the Policy or the procedure
is likely to have an adverse impact on trade, may be made to the
Director General of Foreign Trade for such relief as may be
necessary. The Director General of Foreign Trade may pass such orders
or grant such relaxation or relief, as he may deem fit and proper.
The Director General of Foreign Trade may, in public interest, exempt
any person or class or category of persons from any provision of this
Policy or any procedure and may, while granting such exemption,
impose such conditions as he may deem fit. Such request may be
considered only after consulting ALC if the request is in respect of
a provision of Chapter-4 (excluding any provision relating to Gem &
Jewellery sector) of the Policy/ Procedure. However, any such request
in respect of a provision other than Chapter-4 as given above may be
considered only after consulting Policy Relaxation Committee.
Principles
of Restriction
- DGFT may, through a notification, adopt and enforce any measure necessary for:-
- Protection of public morals.
- Protection of human, animal or plant life or health.
- Protection of patents, trademarks and copyrights and the prevention of deceptive practices.
- Prevention of prison labour.
- Protection of national treasures of artistic, historic or archeological value.
- Conservation of exhaustible natural resources.
- Protection of trade of fissionable material or material from which they are derived; and
- Prevention of traffic in arms, ammunition and implements of war.
- Restricted Goods
Any
goods, the export or import of which is restricted under ITC(HS) may
be exported or imported only in accordance with a licence/
certificate/ permission or a public notice issued in this behalf.
Terms
and Conditions of a Licence/ Certificate/ Permission
Every
licence/certificate/permission shall be valid for the period of
validity specified in the licence/ certificate/permission and shall
contain such terms and conditions as may be specified by the
licensing authority which may include:
(a)
The quantity, description and value of the goods;
(b)
Actual User condition;
(c
) Export obligation;
(d)
The value addition to be achieved; and
(e)
The minimum export price.
Licence/
Certificate/ Permission not a Right
No
person may claim a licence/certificate/ permission as a right and the
Director General of Foreign Trade or the licensing authority shall
have the power to refuse to grant or renew a
licence/certificate/permission in accordance with the provisions of
the Act and the Rules made thereunder.
Penalty
If
a licence/certificate/permission holder violates any condition of the
licence/certificate/ permission or fails to fulfil the export
obligation, he shall be liable for action in accordance with the Act,
the Rules and Orders made there under, the Policy and any other law
for the time being in force.
State
Trading
Any
goods, the import or export of which is governed through exclusive or
special privileges granted to State Trading Enterprise(s), may be
imported or exported by the State Trading Enterprise(s) as specified
in the ITC(HS) Book subject to the conditions specified therein. The
Director General of Foreign Trade may, however, grant a
licence/certificate/permission to any other person to import or
export any of these goods.
In
respect of goods the import or export of which is governed through
exclusive or special privileges granted to State Trading
Enterprise(s), the State Trading Enterprise(s) shall make any such
purchases or sales involving imports or exports solely in accordance
with commercial considerations, including price, quality,
availability, marketability, transportation and other conditions of
purchase or sale. These enterprises shall act in a non discriminatory
manner and shall afford the enterprises of other countries adequate
opportunity, in accordance with customary business practices, to
compete for participation in such purchases or sales.
Importer-Exporter
Code Number
No
export or import shall be made by any person without an
Importer-Exporter Code (IEC) number unless specifically exempted. An
Importer-Exporter Code (IEC) number shall be granted on application
by the competent authority in accordance with the procedure specified
in the Handbook (Vol.1).
Trade
with Neighbouring Countries
The
Director General of Foreign Trade may issue, from time to time, such
instructions or frame such schemes as may be required to promote
trade and strengthen economic ties with neighbouring countries.
Transit
Facility
Transit
of goods through India from or to countries adjacent to India shall
be regulated in accordance with the bilateral treaties between India
and those countries.
Trade
with Russia under Debt- Repayment Agreement
In
the case of trade with Russia under the Debt Repayment Agreement, the
Director General of Foreign Trade may issue, from time to time, such
instructions or frame such schemes as may be required, and anything
contained in this Policy, in so far as it is inconsistent with such
instructions or schemes, shall not apply.
Actual
User Condition
Capital
goods, raw materials, intermediates, components, consumables, spares,
parts, accessories, instruments and other goods, which are importable
without any restriction, may be imported by any person. However, if
such imports require a licence/certificate/ permission, the actual
user alone may import such goods unless the actual user condition is
specifically dispensed with by the licensing authority.
Second
Hand Goods
All
second hand goods shall be restricted for imports and may be imported
only in accordance with the provisions of this Policy, ITC(HS),
Handbook (Vol.1), Public Notice or a licence/certificate/permission
issued in this behalf.
Import
of samples
Import
of samples shall be governed by the provisions given in Handbook
(Vol.1).
Import
of Gifts
Import
of gifts shall be permitted where such goods are otherwise freely
importable under this Policy. In other cases, a Customs Clearance
Permit (CCP) shall be required from the DGFT.
Passenger
Baggage
Bonafide
household goods and personal effects may be imported as part of
passenger baggage. Samples of such items that are otherwise freely
importable under this Policy may also be imported as part of
passenger baggage without a licence/certificate/ permission.
Exporters coming from abroad are also allowed to import drawings,
patterns, labels, price tags, buttons, belts, trimming and
embellishments required for export, as part of their passenger
baggage without a licence/certificate/ permission.
Import
on Export basis
New
or second hand capital goods, equipments, components, parts and
accessories, containers meant for packing of goods for exports may be
imported for export without a licence/certificate/permission on
execution of Legal Undertaking/ Bank Guarantee with the Customs
Authorities.
Re-import
of goods repaired abroad
Capital
goods, equipments, components, parts and accessories, whether
imported or indigenous, may be sent abroad for repairs, testing,
quality improvement or upgradation or standardisation of technology
and re-imported without a licence/certificate/permission.
Import
of goods used in projects abroad
After
completion of the projects abroad, project contractors may import,
without a licence/certificate/permission, used goods including
capital goods provided they have been used for at least one year.
Sale
on High Seas
Sale
of goods on high seas for import into India may be made subject to
this Policy or any other law for the time being in force.
Import
under Lease Financing
Permission
of licensing authority is not required for import of new capital
goods under lease financing.
Clearance
of Goods from Customs
The
goods already imported/shipped/arrived, in advance, but not cleared
from Customs may also be cleared against the licence/ certificate/
permission issued subsequently.
Execution
of BG/LUT
Wherever
any duty free import is allowed or where otherwise specifically
stated, the importer shall execute a Legal Undertaking (LUT)/Bank
Guarantee (BG) with the Customs Authority before clearance of goods
through the Customs, in the manner as may be prescribed. In case of
indigenous sourcing, the licence/certificate/ permission holder shall
furnish BG/LUT to the licensing authority before sourcing the
material from the indigenous supplier/nominated agency.
Private/
Public Bonded Warehouses for Imports
Private/Public
bonded warehouses may be set up in the Domestic Tariff Area as per
the terms and conditions of notification issued by Department of
Revenue. Any person may import goods except prohibited items, arms
and ammunition, hazardous waste and chemicals and warehouse them in
such private/public bonded warehouses. Such goods may be cleared for
home consumption in accordance with the provisions of this Policy and
against Licence/certificate/ permission, wherever required. Customs
duty as applicable shall be paid at the time of clearance of such
goods. If such goods are not cleared for home consumption within a
period of one year or such extended period as the custom authorities
may permit, the importer of such goods shall re-export the goods.
Free
Exports
All
goods may be exported without any restriction except to the extent
such exports are regulated by ITC(HS) or any other provision of this
Policy or any other law for the time being in force. The Director
General of Foreign Trade may, however, specify through a public
notice such terms and conditions according to which any goods, not
included in the ITC(HS), may be exported without a licence/
certificate/ permission.
Export
of samples
Export
of samples shall be governed by the provisions given in Handbook
(Vol.1)
Export
of Passenger Baggage
Bonafide
personal baggage may be exported either along with the passenger or,
if unaccompanied, within one year before or after the passenger's
departure from India. However, items mentioned as Restricted in
ITC(HS) shall require a licence/certificate/permission, except in the
case of edible items.
Export
of Gifts
Goods,
including edible items, of value not exceeding Rs.1,00,000/- in a
licensing year, may be exported as a gift. However, items mentioned
as restricted for exports in ITC(HS) shall not be exported as a gift,
without a licence/ certificate/ permission, except in the case of
edible items.
Export
of Spares
Warranty
spares, whether indigenous or imported, of plant, equipment,
machinery, automobiles or any other goods may be exported upto 7.5%
of the FOB value of the exports of such goods along with the main
equipment or subsequently but within the contracted warranty period
of such goods.
Third
Party Exports
Third
party exports, as defined in paragraph 9.56 shall be allowed under
the Policy.
Export
of Imported Goods
Goods
imported, in accordance with this Policy, may be exported in the same
or substantially the same form without a licence/certificate/
permission provided that the item to be imported or exported is not
mentioned as restricted for import or export in the ITC(HS). Exports
of such goods imported against payment in freely convertible currency
would be permitted against payment in freely convertible currency.
Goods,
including those mentioned as restricted item for import or export
(except prohibited items) in ITC(HS), may be imported under Customs
Bond for export in freely convertible currency without a
licence/certificate/ permission.
Export
of Replacement Goods
Goods
or parts thereof on being exported and found defective/damaged or
otherwise unfit for use may be replaced free of charge by the
exporter and such goods shall be allowed clearance by the customs
authorities provided that the replacement goods are not mentioned as
restricted items for exports in ITC(HS).
Export
of Repaired Goods
Goods
or parts thereof on being exported and found defective, damaged or
otherwise unfit for use may be imported for repair and subsequent
re-export. Such goods shall be allowed clearance without a
licence/certificate/ permission and in accordance with customs
notification issued in this behalf.
Private
Bonded Warehouses for Exports
Private
bonded warehouse exclusively for exports may be set up in DTA as per
the terms and conditions of the notifications issued by Department of
Revenue. Such warehouse shall be entitled to procure the goods from
domestic manufacturers without payment of duty. The supplies made by
the domestic supplier to the notified warehouses shall be treated as
physical exports provided the payments for the same are made in free
foreign exchange.
Denomination
of Export Contracts
All
export contracts and invoices shall be denominated in freely
convertible currency and export proceeds shall be realised in freely
convertible currency. Contracts for which payments are received
through the Asian Clearing Union (ACU) shall be denominated in ACU
Dollar. The Central Government may relax the provisions of this
paragraph in appropriate cases. Export contracts and Invoices can be
denominated in Indian rupees against EXIM Bank/Government of India
line of credit.
Realisation
of Export Proceeds
If
an exporter fails to realise the export proceeds within the time
specified by the Reserve Bank of India, he shall, without prejudice
to any liability or penalty under any law for the time being in
force, be liable to action in accordance with the provisions of the
Act, the Rules and Orders made thereunder and the provisions of this
Policy.
Free
movement of export goods, No seizure of Stock
2.42.1
No seizure of stock shall be made by any agency so as to disrupt the
manufacturing activity and delivery schedule of export goods. In
exceptional cases, the concerned agency may seize the stock on the
basis of prima facie evidence. However, such seizure should be lifted
within 7 days.
Export
Promotion Council
2.43
The basic objective of export promotion councils is to promote and
develop the exports of the country. Each Council is responsible for
the promotion of a particular group of products, projects and
services. The list of the councils, and their main functions are
given in Handbook (Vol.1).
Registration
-cum-Membership Certificate
2.44 Any person, applying for (i) a licence/ certificate/ permission to import/ export, [except items listed as restricted items in ITC(HS)] or (ii) any other benefit or concession under this policy shall be required to furnish Registration-cum-Membership Certificate (RCMC) granted by the competent authority in accordance with the procedure specified in the Handbook (Vol.1) unless specifically exempted under the Policy.
