Home India Ministry of Commerce and Industry Enabling provisions for import of inputs that are subjected ...
Date: 07-Mar-2024 Category: Extra Ordinary State: Union Government Country: India

Enabling provisions for import of inputs that are subjected to mandatory Quality Control Orders QCOs by Advance Authorisation holders and EOU

Issued by Ministry of Commerce and Industry · Directorate General of Foreign Trade

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Executive Summary & Key Takeaways

What it means

  • The gazette notification introduces amendments to the Foreign Trade Policy (FTP) 2023, providing enabling provisions for exempting inputs imported by Advance Authorisation holders and Export Oriented Units (EOUs) from mandatory Quality Control Orders (QCOs) under specific conditions.
  • The notification lists the Ministries/Departments whose QCO notifications are exempted by DGFT for goods used in the manufacture of export products, as detailed in Appendix-2Y of FTP 2023.

Key Changes

  • A new para 4.18(A) is inserted in FTP 2023, outlining the conditions for importing items under Advance Authorisation without complying with mandatory QCOs. Key conditions include pre-import conditions, utilization in export product manufacturing, and export under the same authorization.
  • Exemption from mandatory QCOs must be specifically endorsed in the Advance Authorisation upon request. Imports without this endorsement must comply with QCOs.
  • Unutilized imports or products manufactured with inputs imported without QCO compliance cannot be transferred to the Domestic Tariff Area (DTA), even after regularizing export obligation defaults.
  • The process for regularizing unutilized imports involves destruction in the presence of GST/Customs authorities or re-export, along with payment of exempted duties/taxes/cesses with interest and a composition fee of 10% of the CIF value of unutilized imported inputs to DGFT.
  • QCO exemptions are available only for physical exports and not for deemed exports for Advance Authorisation holders.
  • The facility of clubbing under para 4.36 of the Handbook of Procedures (HBP) 2023 is not available for these exemptions.
  • A sub-para is added to para 4.24 of FTP 2023, stating that import of inputs without QCO compliance is not allowed under the Duty Free Import Authorisation (DFIA) scheme.
  • A sub-para is added to para 6.07 of FTP 2023, providing EOUs with an exemption from mandatory QCOs issued under the BIS Act, 2016, for inputs required for export production, subject to submitting an undertaking to Customs authorities and the Development Commissioner. No DTA clearance is allowed for such inputs or goods made from them.
  • Para 2.03 of FTP 2023 is updated to include a list of Ministries/Departments with exempted QCO notifications in Appendix 2Y, including the Ministry of Steel and the Department for Promotion of Industry and Internal Trade (DPIIT).

Impact Analysis

Stakeholders

  • GST Authorities: Will need to be present to certify the destruction of goods.

Suggested Action Items

  • All Stakeholders: Familiarize themselves with Appendix 2Y of FTP 2023 to understand the list of Ministries/Departments with exempted QCO notifications.

Key Entities Referenced

Foreign Trade Policy (FTP) 2023: The primary policy framework governing import and export activities in India. This notification amends specific paragraphs within the FTP 2023. Advance Authorisation: A scheme that allows duty-free import of inputs required for export production, subject to certain conditions and export obligations. Export Oriented Unit (EOU): A unit undertaking to export its entire production of goods and services, subject to specific regulations and incentives. Mandatory Quality Control Orders (QCOs): Orders issued by various Ministries/Departments mandating compliance with specific quality standards for certain products. DGFT (Directorate General of Foreign Trade): The government agency responsible for implementing and regulating foreign trade policies in India. BIS Act, 2016: The Bureau of Indian Standards Act, which provides the legal framework for standardization and quality certification of goods. Handbook of Procedures (HBP) 2023: A document providing detailed procedures and guidelines for implementing the Foreign Trade Policy. Duty Free Import Authorisation (DFIA): A scheme that allows duty-free import of inputs with export obligation. Appendix-2Y of FTP 2023: A list of Ministries/Departments whose notifications on mandatory QCOs are exempted by the DGFT for goods to be utilized/consumed in manufacture of export products. Ministry of Steel: A government ministry responsible for the development of the steel industry. Department for Promotion of Industry and Internal Trade (DPIIT): A department under the Ministry of Commerce and Industry responsible for promoting industrial development and internal trade. Foreign Trade (Development & Regulation) Act, 1992: The Act of Parliament that empowers the Central Government to make provisions for the development and regulation of foreign trade by facilitating imports and increasing exports.
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रजिस्ट्री स.ं डी.एल.- 33004/99 REGD. No. D. L.-33004/99 सी.जी.-डी.एल.-अ.-08032024-252744 CG-DxLx-xEG-I0D8H0x3x2x0 24-252744 xxxGIDExxx असाधारण EXTRAORDINARY भाग II—खण् ड 3—उप-खण्ड (ii) PART II—Section 3—Sub-section (ii) प्राजधकार स ेप्रकाजित PUBLISHED BY AUTHORITY स.ं 1100] नई दिल्ली, बृहस्ट्प जतवार, माच च7, 2024/फाल्ग नु 17, 1945 No. 1100] NEW DELHI, THURSDAY, MARCH 7, 2024/PHALGUNA 17, 1945 okf.kT; ,oa m|ksx ea=ky; (okf.kT; foHkkx) (fons'k O;kikj egkfuns'kky;) अजधसचू ना नई दिल्ली, 7 माच,च 2024 का.आ. 1162(अ).—fon’s k O;kikj uhfr ¼,QVhih½] 2023 ds iSjk 1-02] 2-01 vkSj 2-03 ds lkFk ifBr] ;Fkk la’kkfs/kr fons’k O;kikj ¼fodkl ,o a fofu;eu½ vf/kfu;e] 1992 ¼1992 dh la- 22½ dh /kkjk 5 ds lkFk ifBr /kkjk 3 ds rgr iznÙk ’kfDr;kas dk iz;ksx djrs gq,] dsUnz ljdkj ,rn~}kjk ,QVhih] 2023 esa fuEufyf[kr la’kks/ku djrh gSA 2- ,QVhih 2023 ds iSjk 4-18 ds uhps ,d u;k iSjk 4-18 ¼d½ fuEukuqlkj ’kkfey fd;k tkrk gS% 1662 GI/2024 (1)2 THE GAZETTE OF INDIA : EXTRAORDINARY [PART II—SEC. 3(ii)] vfuok;Z xq.koÙkk fu;a=.k vkns’kks a ¼D;wlhvks½ ds vuqikyu ds fcuk vfxze izkf/kdkj Ik= ds rgr fufof"V;ksa dk vk;kr fuEufyf[kr ’krkZsa ds v/;/khu gkxs k% ¼i½ vfuok;Z xq.koÙkk fu;a=.k vkns’kkas ¼D;wlhvks½ ds vuqikyu ds fcuk vfxze izkf/kdkj i= ds rgr fufof"V;kas dk vk;kr] iwoZ&vk;kr ’krZ ds lkFk gksxkA ,ls h fufof"V;kas dk mi;ksx fu;kZr mRikn ds fofuekZ.k ea s fd;k tk,xk ¼viO;; ds fy, lkekU; NwV nsr s gq,½ vkSj leku izkf/kdkj i= ds rgr fu;kZr fd;k tk,xkA ¼ii½ izkf/kdkj i= /kkjd ds vuqjks/k ij vfxze izkf/kdkj i= es a vfuok;Z xq.koÙkk fu;a=.k vkn’kkas ls NwV dks fo’ks"k #i ls i`"Bkafdr fd;k tk,xkA NwV ds fof’k"V i`"Bkadu ds fcuk izkf/kdkj i= ds rgr vk;kr vfuok;Z xq.koÙkk fu;a=.k vkns’kks a ds vuqlkj fd;k tk,xkA ¼iii½ vfuok;Z xq.koÙkk fu;a=.k vkn’kkas ds vuqikyu ds fcuk ,ls s fdlh Hkh viz;qDr vk;krks a ;k vk;kfrr fufof"V;kas ds lkFk fufeZr mRiknksa dks fu;kZr nkf;Ro dh iwfrZ es a pwd ds fu;fer gksus ds ckn Hkh MhVh, es a LFkkukarfjr ugh a fd;k tk,xkA bl iSjk ds iz;kstu ds fy, viz;qDr vk;kr dk vFkZ vk;kfrr fufof"V gS ¼vfuok;Z xq.koÙkk fu;a=.k vkns’kkas ds vuqikyu ds fcuk½ ftls leku izkf/kdkj i= ds rgr fu;kZr fd, x, mRikn esa flvksu@rnFkZ ekunMa kas ds vuqlkj “kkfey ugha fd;k x;k gSA ¼iv½ viz;qDr vk;kr dk s fuEukuqlkj fofu;fer fd;k tk,xkA ¼d½ viz;qDr lkexzh dk s {k=s kf/kdkj izkIr th,lVh@lhek ’kqYd izkf/kdkfj;kas dh mifLFkfr es a u"V dj fn;k tk,xk tk s eky dks u"V fd, tkus dks izekf.kr djsxa s ;k bldk iqu% fu;kZr fd;k tk ldrk gS( vkSj blds vykok ¼[k½ vfxze izkf/kdkj i= /kkjd lhek ’kqYd izkf/kdkfj;ks a dks viz;qDr NwV izkIr lkexzh ij C;kt ds lkFk NwV izkIr ’kqYd@dj@midj dk Hkqxrku djxs k vkSj Mhth,QVh dks viz;qDr vk;kfrr fufof"V ds lhvkbZ,Q ewY; ds 10 izfr’kr lerqY; jkf’k dk la;kts u ’kqYd Hkh nxs kA bZvksMhlh iznku djus ls igys bldk izek.k lacfa/kr vkj, dks izLrqr fd;k tk,xkA ¼v½ xq.koÙkk fu;a=.k vkns’kksa ls NwV dsoy okLrfod fu;kZrksa ds fy, miyC/k gS vkSj ,ls h NwV vfxze izkf/kdkj i= /kkjdkas ds fy, ekU; fu;kZrks a gsrq vuqer ugh gkxs hA ¼vi½ izfØ;k iqLrd ¼,pchih½] 2023 ds iSjk 4-36 ds rgr Dyfcax dh lqfo/kk miyC/k ugha gksxhA ¼vii½ ^^,ls s izkf/kdkj i=ksa ds fy, bZvks vof/k izfØ;k iqLrd ds iSjk 4-40 ds vuqlkj gkxs h^^ ¼viii½ ;g NwV vkxs fons’k O;kikj uhfr ds iSjk 2-03 ¼x½ ds v/khu gS% 3- fuEufyf[kr mi iSjk ,QVhih 2023 ds ekStwnk iSjk 4-24 esa tksMk+ x;k gS% ^^¼?k½ Mh,QvkbZ, Ldhe ds rgr vfuok;Z xq.koÙkk fu;a=.k vkns’kks a ds vuqikyu ds fcuk fufof"V;ks a ds vk;kr dh vuqefr ugha gS^^ 4- fuEufyf[kr mi&iSjk ,QVhih 2023 ds ekStwnk iSjk 6-07 es a tksM+k x;k gS% ^^¼V½ fufof"V ds vk;kr ij bZvks;w bdkb;ks a dks chvkbZ,l vf/kfu;e] 2016 ds rgr tkjh vfuok;Z xq.koÙkk fu;a=.k vkn’sk ¼D;wlhvk½s dh Ikz;kTs ;rk ls NwV iznku dh tk,xh tks fu;kZr mRiknu ds fy, vifs{kr gSA vk;kr ds le; bZvks;w bdkb;ks a }kjk lhek ’kqYd izkf/kdkfj;kas dk s bl vk’k; dk ,d ’kiFk i= izLrqr fd;k tk,xk vkSj bldh ,d izfr lacfa/kr fodkl vk;qDr dks Hkh lkSaih tk,xhA ,ls h fufof"V ;k ,ls h fufof"V;ks a ls fufeZr oLrqvkas dh fdlh MhVh, fDy;jUs l dh vuqefr ugha gS xq.koDrk fu;a=.k vkns’kksa ls NwV dsoy okLrfod fu;kZrks a ds fy, miyC/k gS vkSj ,ls h NwV vfxze izkf/kdkj i= /kkjdkas ds fy, ekU; fu;kZrkas gsrq vuqer ugh gksxhA ;g NwV vkxs fons’k O;kikj uhfr ds iSjk 2-03 ¼x½ ds v/khu gS^^A[भाग II—खण् ड 3(ii)] भारत का रािपत्र : असाधारण 3 5- fuEufyf[kr mi&iSjk fons’k O;kikj uhfr 2023 ds ekStwnk iSjk 2-03 ds lkFk layXu gSA ¼x½ ea=ky;ksa@foHkkxks a dh lwph ftudh vf/klwpuk vfuok;Z xq.koÙkk fu;a=.k vkns’kkas ij gS] ftUgas fu;kZr mRiknka s ds fofuekZ.k es a mi;ksx@miHkksx dh tku s okyh oLrqvkas ds fy, Mhth,QVh n~okjk NwV nh xbZ gS] fons’k O;kikj uhfr] 2023 ds ifjf’k"V 2e es a nh xbZ gSA vfxze izkf/kdkj i= /kkjdkas vkSj bZvks;w bdkb;ks a }kjk vk;kfrr fufof"V;ks a dks vfuok;Z xq.koÙkk fu;a=.k vkns’kks a ls NwV nsus ds fy, leFkZdkjh izko/kku fd, x, gSaA rnuqlkj] ea=ky;ksa@foHkkxks a ¼vFkkZr bLikr ea=ky; vkSj m|kxs lao/kZu vkSj vkra fjd O;kikj foHkkx dh lwph dks fon’s k O;kikj uhfr] 2023 ds ifjf’k"V 2e esa vf/klwfpr fd;k x;k gSA bls okf.kT; ,o a m|kxs ea=h ds vuqeksnu ls tkjh fd;k tkrk gSA [फा. स.ं 01@89@180@13@,,e&15@ihlh&2[d]@bZ&5910] lark"s k dqekj lkjaxh] egkfuns'kd fons'k O;kikj vkSj insu vij lfpo MINISTRY OF COMMERCE AND INDUSTRY (Department of Commerce) (DIRECTORATE GENERAL OF FOREIGN TRADE) NOTIFICATION New Delhi, the 7th March, 2024 No. 69/2023 Subject:- Enabling provisions for import of inputs that are subjected to mandatory Quality Control Orders (QCOs) by Advance Authorisation holders and EOU- reg S.O. 1162(E).—In exercise of powers conferred by Section 3 read with Section 5 of the Foreign Trade (Development & Regulation) Act, 1992 (No. 22 of 1992), as amended, read with Para 1.02, 2.01 and 2.03 of the Foreign Trade Policy (FTP), 2023, the Central Government hereby makes the following amendments to FTP, 2023. 2. Below para 4.18 of FTP 2023, a new para 4.18 (A) is inserted as follows: “4.18A Importability of items under Advance Authorisation without mandatory Quality Control Orders (QCOs) Import of Inputs under Advance Authorisation, without compliance to the mandatory QCOs, shall be subjected to the following conditions: (i) Import of inputs under the Advance authorisation without compliance to the mandatory QCOs shall be with pre-import condition. Such inputs shall be utilised in the manufacturing of the export product (making normal allowance for wastage) and shall be exported under the same authorisation. (ii) Exemption from mandatory QCOs shall be specifically endorsed in the Advance authorisation, upon the request of the authorisation holder. Imports under Authorisation without specific endorsement of exemption shall be made in accordance with mandatory QCOs. (iii) Any unutilised imports or the products manufactured with inputs imported without compliance to the mandatory QCOs, shall not be transferred to DTA, even after regularisation of default in fulfilment of export obligation. For the purpose of this para, unutilised imports means imported inputs (without compliance of mandatory QCOs) which have not been accounted for, as per SION/Ad-hoc Norms, in the product exported under the same authorisation. (iv) The unutilised imports shall be regularised as follows:4 THE GAZETTE OF INDIA : EXTRAORDINARY [PART II—SEC. 3(ii)] (a) The unutilised material shall be destroyed in the presence of jurisdictional GST/Customs authorities who shall certify the destruction of the goods or same may be re-exported; and in addition (b) The AA holder shall pay duties/taxes/cesses exempted along with interest on the unutilsed exempted material to Customs Authorities plus composition fee of an amount equivalent to 10% of the CIF value of unutilized imported inputs to DGFT. Proof thereof shall be submitted to the RA concerned before grant of EODC. (v) The exemption from QCO will be available for physical exports only and such exemption will not be allowed for deemed exports for Advance Authorisation Holders. (vi) The facility of clubbing under para 4.36 of Handbook of Procedures (HBP), 2023 shall not be available. (vii) The EO period for such authorizations shall be as per para 4.40 of Handbook of Procedures. (viii) This exemption is further subjected to para 2.03 (c) of FTP. 3. The following sub-para is appended to the existing para 4.24 of FTP 2023: “(d) Import of Inputs without compliance to the mandatory QCOs under DFIA scheme is not allowed.” 4. The following sub-para is appended to the existing para 6.07 of FTP 2023: “(k) Exemption from applicability of mandatory Quality Control Orders (QCOs) issued under the BIS Act, 2016, shall be provided to EOU on import of inputs which are required for export production. An undertaking to that effect will be submitted to the Customs authorities by the EOU at the time of importation and a copy of the same shall also be submitted to the Development Commissioner concerned. No DTA clearance of such inputs or goods manufactured made out of such inputs, are allowed. The exemption from QCO will be available for physical exports only and such exemption will not be allowed for deemed exports. This exemption is further subjected to para 2.03 (c) of FTP.” 5. The following sub-para is appended to the existing para 2.03 of FTP 2023: (c) The list of Ministries/Departments whose notifications on mandatory QCOs, that are exempted by the DGFT for goods to be utilised/consumed in manufacture of export products, are given in Appendix-2Y of FTP 2023. Effect of this Notification: Enabling provisions are made for exempting inputs imported by Advance Authorisation holders and EOUs, from mandatory Quality Control Orders (QCOs) Accordingly, list of Ministries / Departments ( i.e. Ministry of Steel and Department for Promotion of Industry and Internal Trade (DPIIT) are notified in Appendix 2Y of FTP, 2023. This issue with the approval of Minister of Commerce & Industry. [F. No. 01/89/180/13/AM-15/PC-2[A]/E-5910] SANTOSH KUMAR SARANGI, Director General of Foreign Trade, Ex-Officio Addl. Secy. Uploaded by Dte. of Printing at Government of India Press, Ring Road, Mayapuri, New Delhi-110064 and Published by the Controller of Publications, Delhi-110054.

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