Amendments in Annexure IV under Appendix 2A (Imports of Items under TRQ under India UAE CEPA)

## Policy Analysis Report: Amendments to Annexure IV under Appendix 2A Regarding Imports under TRQ under India-UAE CEPA **1. Executive Summary:** This report analyzes amendments to Annexure IV of Appendix 2A, concerning the procedure for importing items under the Tariff Rate Quota (TRQ) within the India-UAE Comprehensive Economic Partnership Agreement (CEPA). The amendments, detailed in Public Notice No. 47/2015-2020, primarily revise conditions for TRQ implementation, notably for tariff head 7108 (Gold), and extend the validity of existing TRQs. Key findings include changes to eligibility criteria for gold importers, revalidation deadlines, and the introduction of annual allocation for specific tariff heads from FY2023-24. These changes aim to refine the TRQ mechanism under the India-UAE CEPA. **2. Introduction:** This report provides an informative overview and analysis of amendments to Annexure IV under Appendix 2A, concerning the imports of items under TRQ under the India-UAE CEPA. This analysis is based solely on the text of Public Notice No. 47/2015-2020, dated December 29, 2022. **3. Policy Overview:** * This report concerns amendments to Annexure IV of Appendix 2A related to Foreign Trade Policy 2015-2020. * **Core Objective(s):** Based on the provided text, the core objectives of these amendments are to: * Revise the procedures for import of items under TRQ under the India-UAE CEPA. * Specify conditions for the import of gold (tariff head 7108) under the TRQ scheme. * Revalidate existing TRQs issued for FY2022-23. * Establish a framework for annual allocation of TRQs from FY2023-24 onwards for tariff head 7108. **4. Background and Rationale:** This document amends existing import guidelines under the India-UAE CEPA's TRQ framework. The amendment seems designed to address specific issues related to the implementation of TRQs, particularly for gold imports. The text suggests a need to clarify eligibility criteria for gold importers, streamline the application process (revalidation and annual allocation), and align the TRQ system with financial year timelines. The amendments also suggest a desire to ensure proper utilization of TRQs and prevent misuse, especially with respect to gold. **5. Key Provisions / Changes:** The key changes introduced by this amendment are: * **General Applicability:** Traders are allowed to import under TRQs for all tariff lines except 7108. * **Tariff Head 7108 (Gold):** * **Revalidation:** TRQs issued for import under tariff head 7108 for the 1st, 2nd, and 3rd quarters of FY2022-23 can be revalidated until March 31, 2023. * *Change Effect:* Provides additional time for existing TRQ holders to utilize their allocations. * **Validity Period:** The validity for TRQs under tariff head 7108 issued for the 4th quarter of FY2022-23 will be until June 30, 2023. * *Change Effect:* Sets a clear deadline for using TRQs issued in the final quarter. * **Annual Allocation:** From FY2023-24, the allocation of TRQs under tariff head 7108 will be on an annual basis. * *Change Effect:* Shifts from a quarterly to an annual allocation system, potentially impacting application frequency and allocation amounts. * **Application Deadline:** The last date for applying for TRQs under the India-UAE CEPA for FY2023-24 is February 28, 2023. * *Change Effect:* Establishes a firm deadline for annual TRQ applications. * **Eligibility Criteria (Gold):** The amendment outlines specific eligibility criteria for jewellery manufacturers seeking gold TRQs, including: * Being a jewellery manufacturer. * Engaged in the business of goods falling under ITCHS codes 7108, 7113, 7114 and 7118 in Chapter 71 of ITCHS. * Having an average annual turnover of Rs. 25 crores over the last 3 financial years. * Meeting specific turnover composition requirements related to HS code 7113. * Having a GST number and filed GST returns. * Providing certified financial statements. * *Change Effect:* Introduces stricter requirements for eligibility, likely aiming to target genuine jewellery manufacturers and prevent misuse of gold TRQs. * **Gold Dore Restriction:** Import of Gold Dore under TRQ shall not be considered. * **Compliance:** The importer shall follow the procedure set out in the Customs Import of Goods at Concessional Rate of Duty or for specified end use Rules, 2022 read with Customs Circular No. 18/2022-Customs dated 10.09.2022. * **End Use:** The IGCR procedure applies to the importer till supply of gold falling under 7108 to enduse recipient and filing of monthly statement. * **Certificate of Origin:** At the time of clearance of the import consignment, the importer in India must produce a Certificate of Origin issued by concerned authorities in UAE. **6. Target Audience and Stakeholders:** The primary target audience and stakeholders affected by these amendments are: * Jewellery manufacturers in India. * Importers involved in trade under the India-UAE CEPA, particularly those dealing with gold (tariff head 7108). * Nominated agencies involved in gold imports. * Customs authorities responsible for implementing the TRQ scheme. * Directorate General of Foreign Trade (DGFT). **7. Implementation Aspects (Inferred):** * **Responsible agency/bodies:** * Directorate General of Foreign Trade (DGFT) is responsible for issuing TRQ authorizations. * Indian Customs EDI System (ICES) is involved in electronic debiting of TRQ imports. * RBI, DGFT, and International Financial Services Centres Authority (IFSCA) are involved in notifying nominated agencies and qualified jewellers for gold imports. * **Timelines/procedures:** * Revalidation of existing TRQs for FY2022-23: Apply on DGFT website by March 31, 2023. * Application for annual allocation for FY2023-24: Apply on DGFT website by February 28, 2023. * TRQ authorization will be issued electronically by the DGFT and transmitted to ICES. * Imports are allowed only upon electronic debiting in the ICES system. **8. Expected Outcomes / Impact of Changes:** The likely intended outcomes of these amendments are: * **Improved Targeting of Gold TRQs:** The stricter eligibility criteria for gold importers should ensure that TRQs are allocated to genuine manufacturers, reducing the potential for misuse. * **Streamlined TRQ Management:** The annual allocation system for gold TRQs from FY2023-24 onwards may lead to better planning and utilization of quotas. * **Enhanced Compliance:** The amendments should improve compliance with import regulations and ensure that TRQs are used for their intended purpose. **9. Conclusion:** The amendments to Annexure IV of Appendix 2A represent a targeted effort to refine the TRQ mechanism under the India-UAE CEPA, particularly with respect to gold imports. By clarifying eligibility criteria, streamlining application processes, and setting clear timelines, these changes aim to improve the effectiveness and integrity of the TRQ scheme. The changes represent a significant change in the administration of gold import TRQs and will require affected parties to adjust their import strategies accordingly.

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