General Provisions
The general provisions for import / export of products are as follows:
- 1. Exports and Imports are free unless regulated: Exports and Imports shall be free, except where regulated by FTP or any other law in force. The item wise export and import policy is specified in ITC (HS) notified by DGFT, and is amended from time to time.
- 2. Compliance with Laws: Every exporter or importer has to comply with the provisions of Foreign Trade (Development & Regulation) Act, 1992 the Rules and Orders made there under, FTP and terms and conditions of any Authorisation granted. 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.
- 3. Interpretation of Policy: In case of any doubts/ clarifications in respect of interpretation of any provision contained in FTP, or classification of any item in ITC (HS) or HBP v1 or HBP v2, or Schedule of Duty Entitlement Pass Book Scheme (DEPB) rates (including content, scope or issue of an authorization there under), it is to be referred to DGFT.
- 4. Procedures: The procedures are laid down by DGFT which are to be followed by exporters, importers, any licensing or any other competent authority for purpose of implementing provisions of FT (D&R) Act, the Rules and the Orders made there under and FTP. Such procedures are published in the form of Public Notice which is amended from time to time. DGFT in consultation with other relevant committees is also responsible for passing orders on policy exemptions
- 5. Restricted Goods: Any goods, export or import of which is restricted under ITC(HS) may be exported or imported only in accordance with an Authorisation or in terms of a public notice issued in this regard.
- 6. Terms and Conditions of a licence / Certificate / Permission / Authorisation: Every Authorisation shall be valid for prescribed period of validity and shall contain such terms and conditions as may be specified by Regional Authority (RA) which may include: Quantity, description and value of goods; Actual User condition; Export obligation; Value addition to be achieved; and Minimum export / import price.
- 7. Authorisation / Licence / Certificate / Permission not a Right: No person may claim an Authorization as a right and DGFT or RA shall have power to refuse to grant or renew the same in accordance with provisions of FT (D&R) Act, Rules made there under and FTP.
- 8. Penalty: If an Authorisation holder violates any condition of such Authorisation or fails to fulfill export obligation, he shall be liable for action in accordance with FT (D&R) Act, the Rules and Orders made there under, FTP and any other law for time being in force.
- 9. Importer-Exporter Code (IEC) Number: No export or import shall be made by any person without an IEC number unless specifically exempted. An IEC number shall be granted on application by competent authority in accordance with procedure specified in the subsequent section of the chapter.
- 10. Trade with Neighboring Countries: DGFT may issue instructions or frame schemes as may be required to promote trade and strengthen economic ties with neighbouring countries.
- 11. Transit Facility: Transit of goods through India from / or to countries adjacent to India shall be regulated in accordance with bilateral treaties between India and those countries and will be subject to such restrictions as may be specified by DGFT in accordance with International Conventions.
- 12. 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 an Authorisation, actual user alone may import such goods unless actual user condition is specifically dispensed with by RA.
- 13. Second Hand Goods: Import of re-manufactured goods shall be allowed only against a licence.
- 14. Import on Export Basis: Freely exportable new or second hand capital goods, equipments, components, parts and accessories, containers meant for packing of goods for exports, jigs, fixtures, dies and moulds may be imported for export without an Authorisation on execution of Legal Undertaking /Bank Guarantee (LUT / BG) with Customs Authorities.
- 15. Sale on High Seas: Sale of goods on high seas for import into India may be made subject to FTP or any other law in force.
- 16. Clearance of Goods from Customs”: Goods already imported / shipped / arrived, in advance, but not cleared from Customs may also be cleared against an Authorisation issued subsequently.
- 17. Execution of BG / LUT: Wherever any duty free import is allowed or where otherwise specifically stated, importer shall execute prescribed LUT / BG / Bond with Customs Authority before clearance of goods. In case of indigenous sourcing, Authorisation holder shall furnish LUT / BG / Bond to RA concerned before sourcing material from indigenous supplier / nominated agency as prescribed in HBP v1.
- 18. Free Exports: All goods may be exported without any restriction except only besides some export items that are regulated by ITC (HS) or any other provision of FTP or any other law for the time being in force. DGFT may, however, specify through a public notice such terms and conditions according to which any goods, not included in ITC (HS), may be exported without an Authorisation.
- 19. Export of Imported Goods: Goods imported, in accordance with FTP, may be exported in same or substantially the same form without an Authorisation provided that item to be imported or exported is not restricted for import or export in 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 for import (except prohibited items) may be imported under Customs Bond for export in freely convertible currency without an Authorisation provided that item is freely exportable without any conditionality / requirement of Licence / permission as may be required under ITC (HS) Schedule II. Hides, Skins and semi finished leather may be imported in the Public Bonded warehouse for the purpose of Domestic Tariff Area (DTA) sale and the unsold items thereof can be re-exported from such bonded warehouses at 50% of the applicable export duty. However, this facility shall not be allowed for import under Private Bonded warehouse.
- 20. 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 Customs authorities, provided that replacement goods are not mentioned as restricted items for exports in ITC (HS).
- 21. 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 an Authorisation and in accordance with customs notification.
- 22. Denomination of Export Contracts: All export contracts and invoices shall be denominated either in freely convertible currency or Indian rupees but export proceeds shall be realised in freely convertible currency.
- 23 Realization of Export Proceeds: If an exporter fails to realise export proceeds within time specified by RBI, he shall, without prejudice to any liability or penalty under any law in force, be liable to action in accordance with provisions of FT (D&R) Act, Rules and Orders made there under and FTP.
- 24. Free movement of export goods: Consignments of items meant for exports shall not be withheld/ delayed for any reason by any agency of Central / State Government. In case of any doubt, authorities concerned may ask for an undertaking from exporter.
- 25. Registration -cum- Membership Certificate (RCMC): Any person, applying for: (i) an Authorisation to import / export, [except items listed as restricted items in ITC (HS)] or (ii) any other benefit or concession under FTP shall be required to furnish RCMC granted by competent authority in accordance with procedure specified in HBP-v1 unless specifically exempted under FTP. Certificate of Registration as Exporter of Spices (CRES) issued by Spices Board shall be treated as Registration-Cum- Membership Certificate (RCMC) for the purposes under this Policy.
- 26. Exemption / Remission of Service Tax in DTA: For all goods and services which are exported from units in DTA and units in Export Oriented Units (EOU), Electronics Hardware Technology Parks (EHTP), Software Technology Parks (STP) & Bio-Technology Parks (BTP) exemption / remission of service tax levied and related to exports, shall be allowed, as per prescribed procedure in Chapter 4 of HBP v1.
- 27. Exemption from Service Tax on Services received abroad: For all goods and services exported from India, services received / rendered abroad, where ever possible, shall be exempted from service tax.
Import/Export Procedures: A Simplified Illustration of the Complex Framework
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