Execution of BG/ LUT

Exemption from Bank Guarantee

• Wherever any duty free import is allowed or where otherwise specifically stated, the importer shall execute a Legal Undertaking (LUT)/Bank Guarantee (BG)/ Bond 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 LUT / BG / Bond to the licensing authority before sourcing the material from the indigenous supplier/nominated agency.
• All the exporters who have an export turnover of at least Rupees 5 crore in the current or preceding licencing year and have a good track record of three years of exports will be exempted from furnishing a BG for any of the schemes under this Policy and may furnish a LUT in lieu of BG.

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 and Free of charge goods 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.

Export of Gifts

• Goods, including edible items, of value not exceeding Rs.5,00,000/- 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.

Export of Spares

• Warranty spares, whether indigenous or imported, of plant, equipment, machinery, automobiles or any other goods, except those restricted under ITC (HS), may be exported along with the main equipment or subsequently but within the contracted warranty period of such goods subject to approval of RBI.

Third Party Exports

• Third party exports, as defined in Chapter 9 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 (except prohibited items) may be imported under Customs Bond for export in freely convertible currency without a licence/ certificate/ permission provided that the item is freely exportable without any conditionality/ requirement of licence/permission as may be required under ITC (HS) Schedule II.

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, except restricted under ITC (HS), 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 warehouses exclusively for exports may be set up in DTA as per the terms and conditions of the notifications issued by Department of Revenue.
• Such warehouses shall be entitled to procure the goods from domestic manufacturers without payment of duty. The supplies made by a 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 either in freely convertible currency or Indian rupees but the export proceeds shall be realised in freely convertible currency.
• However export proceeds against specific exports may also be realized in rupees provided it is through a freely convertible Vostro account of a non resident bank situated in any country other than a member country of ACU or Nepal or Bhutan.
•  Additionally, the rupee payment through the Vostro account must be against payment in free foreign currency by the buyer in his non resident bank account. The free foreign exchange remitted by the buyer to his non resident bank (after deducting the bank service charges) on account of this transaction would be taken as the export realization under the export promotion schemes of this Policy.
• 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 there under and the provisions of this Policy.

Free movement of export goods

• Consignments of items meant for exports shall not be withheld /delayed for any reason by any agency of the Central/State Government. In case of any doubt, the authorities concerned may ask for an undertaking from the exporter.

No seizure of Stock

• 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 Councils

• 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

• 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.

Electronic Data Interchange

• In an attempt to speed up transactions, reduce physical interface and impart transparency in activities related to exports, digitally signed electronic applications with payment through the electronic fund transfer would be encouraged. Such applications shall be cleared within 24 hours and the applicant shall be required to furnish only 50% of the fee mentioned in Appendix- 29 of Handbook (Vol.1).
• Regularization of EO default and settlement of customs duty and interest through Settlement Commission
• With a view to providing assistance to firms who have defaulted under the Foreign Trade Policy for reasons beyond their control as also facilitating the merger, acquisition and rehabilitation of sick units, it has been decided to empower the Settlement Commission in the Central Board of Excise and Customs to decide such cases also with effect from 01.04.2005.

Easing of documentation requirements

• Pending the finalization of Single Common Document (SCD) for international trade, the government departments dealing with exports and imports will honour the permission/ licence/ certificate issued by the other government departments based on the verification of the export documents like shipping bill, bank realization certificate, packing list, bill of lading etc and will not insist upon fresh submission of these documents

Exemption from Service Tax in DTA

• For all goods and services which are exported from units in Domestic Tariff Area (DTA), remission of service tax levied shall be allowed.

Exemption from Service Tax in EOU/EHTP/ STP/ SEZ/ BTP

• Units in EOU/ EHTP/ STP/ BTP/ SEZ shall be exempted from service tax.

Other Services

• Advisory on the various Export Incentive Schemes, handling litigations relating to Foreign Trade Policy
• Facilitating / Assisting in getting a license, planning, documentation, application preparations, representations and coordination with DGFT and various other ministries and departments.
• Opening of L C solutions
• Import / Export Restriction
• Import / Export Documentation
• Customs clearance – Import / Export
• Customs Duty Payments / Refund
• Freight Forwarding