**Summary:**
This Public Notice No. 34/2023, issued by the Director General of Foreign Trade (DGFT) on October 13, 2023, amends Para 4.10(i) of the Handbook of Procedures 2023, under the authority of Paragraphs 1.03 and 2.04 of the Foreign Trade Policy, 2023. The amendment pertains to the transfer of duty-free materials imported or procured against Advance Authorizations between units of the same company for manufacturing purposes.
The key change is that while prior intimation to the jurisdictional Customs Authority for such transfers remains a requirement, the availment of Input Tax Credit (ITC) on Goods and Services Tax (GST) paid on duty-free imported or indigenously procured materials transferred between units located in the same or different states will now be governed by the provisions of the GST law and its associated rules. Previously, the benefit of Input Tax Credit was not allowed on transferred inputs.
The effect of this amendment, as stated in the notice, is to facilitate ease of doing business and reduce transaction costs related to the Advance Authorization Scheme by permitting the availment of Input Tax Credit on GST paid material.
The issuing authority is Santosh Kumar Sarangi, Director General of Foreign Trade and Ex-officio Additional Secretary to the Government of India. Inquiries can be directed to dgft@nic.in. The notice originates from File No. 01/94/180/028/A/M-24/PC-4.
Key Entities Referenced
Directorate General of Foreign Trade: An agency under the Ministry of Commerce and Industry, Government of India, responsible for implementing the Foreign Trade Policy.
Foreign Trade Policy, 2023: A policy document outlining the guidelines and objectives for India's foreign trade.
Handbook of Procedures, 2023: A document providing detailed procedures related to the Foreign Trade Policy.
Advance Authorisation Scheme: A scheme under the Foreign Trade Policy that allows duty-free import of inputs required for export production.
Input Tax Credit: A mechanism to reduce tax burden by allowing businesses to claim credit for taxes paid on inputs.
GST: Goods and Services Tax, an indirect tax levied on the supply of goods and services.
Santosh Kumar Sarangi: Director General of Foreign Trade & Ex-officio Additional Secretary to the Government of India.
New Delhi: The location of issuance of the Public Notice. New Delhi, Delhi, India.
(TO BE PUBLISHED IN THE GAZETTE OF INDIA EXTRAORDINARY PART-I
SECTION-I)
Government of India
Ministry of Commerce & Industry
Department of Commerce
Directorate General of Foreign Trade
Vanijya Bhawan, New Delhi
Public Notice No. 34/2023
New Delhi, Dated: 13th October, 2023
Subject: Amendments in Para 4.10 (i) of the Handbook of Procedures, 2023.
In exercise of powers conferred under Paragraph 1.03 and 2.04 of the Foreign Trade Policy,
2023, as amended from time to time, the Director General of Foreign Trade hereby makes the
following amendment in the provision of Para 4.10 (i) of the Handbook of Procedures 2023:
Existin2 para 4.10 (i) Amended para 4.10 (i)
Transfer of any duty-free material imported Transfer of any duty-free material imported
or procured against Advance Authorisation or procured against Advance Authorisation
from one unit of a company to another unit from one unit of a company to another unit
for manufacturing purpose shall be done with for manufacturing purpose shall be done with
prior intimation to jurisdictional Customs prior intimation to jurisdictional Customs
Authority. Benefit of Input Tax Credit shall Authority. In case of transfer of duty free
not be claimed on such transferred input. imported or indigenously procured
materials, on which GST has been paid,
between the units located in same or
different States, the availment of Input
Tax Credit shall be governed as per the
provisions of. the GST law & the rules
made thereunder.
Effect of the Public Notice: Para 4.10 (i) of the Handbook of Procedures 2023 has been
amended to permit availment of Input Tax Credit on GST paid material, in respect of Advance
Authorization Scheme, for ease of doing business and reduction of transaction cost.
(Santosh Kumar Sarangi)
Director General of Foreign Trade
Ex-officio Addi. Secretary to the Government of India
e-mail: dgft@nic.in
(Issued from File No. 01/94/180/028/A M24/PC-4)