Home India Ministry of Commerce and Industry Enabling provisions for import of inputs that are subjected ...
Date: 11-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 EOU and SEZ

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

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Executive Summary & Key Takeaways

What it means

  • This notification amends the Foreign Trade Policy (FTP) 2023 to allow exemptions from mandatory Quality Control Orders (QCOs) for inputs imported by Advance Authorisation holders, Export Oriented Units (EOUs), and Special Economic Zones (SEZs) when these inputs are used for export production.
  • The notification overrides Notification No. 69/2023 dated 07.03.2024 with immediate effect.

Key Changes

  • A new paragraph 2.03A is inserted into the FTP 2023, outlining the conditions for importing items under Advance Authorisation, EOU, or SEZ schemes without complying with mandatory QCOs.
  • For Advance Authorisations: Imports without QCO compliance require a pre-import condition, mandating that the inputs be used in manufacturing export products and exported under the same authorisation. The exemption from QCOs must be specifically endorsed on the Advance Authorisation. Unutilised imports or products made from non-compliant inputs cannot be transferred to the Domestic Tariff Area (DTA), even after regularization of export obligation defaults.
  • Unutilised imports under Advance Authorisation must be either destroyed under the supervision of GST/Customs authorities or re-exported. Additionally, effective duty on MFN basis along with interest and a composition fee of 10% of the CIF value of unutilized imported inputs is applicable.
  • QCO exemptions are available only for physical exports and not for deemed exports under Advance Authorisation. Clubbing under para 4.36 of the Handbook of Procedures (HBP) 2023 is not allowed.
  • For textile products, the Export Obligation (EO) period is restricted to 180 days from the date of clearance of the import consignment when QCO exemption is availed.
  • Import of inputs without QCO compliance under the Duty Free Import Authorisation (DFIA) scheme is not permitted.
  • For EOUs and SEZs: Exemption from mandatory QCOs issued under the BIS Act, 2016 is provided for inputs required for export production. DTA clearance of such inputs or goods manufactured from them is not allowed. EOUs and SEZ units must submit an undertaking to the Customs authorities or the Development Commissioner, respectively.
  • A list of Ministries/Departments with notifications on mandatory QCOs exempted by DGFT for goods used in the manufacture of export products is provided in Appendix-2Y of FTP 2023. The listed ministries/departments include the Ministry of Steel, Department for Promotion of Industry and Internal Trade (DPIIT), and Ministry of Textiles.

Impact Analysis

Stakeholders

  • DGFT: Responsible for granting QCO exemptions and maintaining the list of relevant Ministries/Departments in Appendix 2Y of FTP 2023.

Suggested Action Items

  • Relevant government departments should coordinate to ensure smooth implementation of the amended FTP and address any potential challenges.

Key Entities Referenced

Quality Control Orders (QCOs): Mandatory quality standards issued by various Ministries/Departments for specific products. DGFT: Directorate General of Foreign Trade, the agency responsible for implementing the Foreign Trade Policy. Advance Authorisation: A scheme that allows duty-free import of inputs required for export production. Export Oriented Unit (EOU): A unit undertaking to export its entire production. Special Economic Zone (SEZ): A specifically delineated duty-free enclave to be treated as a foreign territory for trade operations and duties and tariffs. Foreign Trade Policy (FTP) 2023: The primary policy document governing India's foreign trade, which is being amended by this notification. BIS Act, 2016: Bureau of Indian Standards Act, the legal framework for standardization, marking and quality certification of goods. Handbook of Procedures (HBP), 2023: A document providing detailed procedures for implementing the Foreign Trade Policy. Domestic Tariff Area (DTA): The general customs territory of India. Ministry of Steel: A government ministry responsible for the development of the steel industry. DPIIT: Department for Promotion of Industry and Internal Trade, a department under the Ministry of Commerce and Industry. Ministry of Textiles: A government ministry responsible for the development of the textile industry. Foreign Trade (Development & Regulation) Act, 1992: The act of parliament that empowers the central government to make provisions relating to import and export.
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रजिस्ट्री स.ं डी.एल.- 33004/99 REGD. No. D. L.-33004/99 सी.जी.-डी.एल.-अ.-13032024-252927 CG-DxLx-xEG-I1D3H0x3x2x0 24-252927 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.ं 1189] नई दिल्ली, सोमवार, मार् च11, 2024/फाल्ग नु 21, 1945 No. 1189] NEW DELHI, MONDAY, MARCH 11, 2024/PHALGUNA 21, 1945 ( ) ( ) नई दिल्ली, 11 मार्,च 2024 का.आ. 1251(अ).—fon’s k O;kikj uhfr ¼,QVhih½] 2023 ds iSjk 1-02 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;ks a dk iz;kxs djrs gq,] dsUnz ljdkj ,rn~}kjk fnukda 07-03-2024 dh vf/klwpuk la- 69@2023 ds vf/kØe.k eas rRdky izHkko ls fons’k O;kikj uhfr] 2023 es a fuEufyf[kr la’kk/s ku djrh gSA 2. ,QVhih 2023 ds iSjk 2-03 ds uhps ,d u;k iSjk 2-03 ¼d½ fuEukuqlkj 'kkfey fd;k tkrk gS% ^^2-03d vfuok;Z xq.koÙkk fu;a=.k vkns’kkas ¼D;wlhvks½ gsrq vuqikyu ds fcuk vfxze izkf/kdkj i=@bZvks;w@,lbZtsM ds rgr enkas dk vk;kr djus dh ;ksX;rk vfuok;Z xq.koÙkk fu;a=.k vkn’s kks a ¼D;wlhvks½ ds vuqikyu ds fcuk vfxze izkf/kdkj i=@bZvks;w@,lbZtsM ds rgr fufof"V;kas dk vk;kr fuEufyf[kr 'krksZa ds v/;/khu gkxs k% 1785 GI/2024 (1)2 THE GAZETTE OF INDIA : EXTRAORDINARY [PART II—SEC. 3(ii)] i½ vfxze izkf/kdkj i= grs q : d½ 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 ,slh fufof"V;ks a dk mi;ksx fu;kZr mRikn ds fofuekZ.k eas fd;k tk,xk ¼viO;; ds fy, lkekU; NwV nrs s gq,½ vkSj leku izkf/kdkj i= ds rgr fu;kZr fd;k tk,xkA [k½ izkf/kdkj i= /kkjd ds vuqjk/s k ij vfxze izkf/kdkj i= es a vfuok;Z xq.koÙkk fu;a=.k vkns’kks a ls NwV dk s 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 vkn’s kks a ds vuqlkj fd;k tk,xkA x½ vfuok;Z xq.koÙkk fu;a=.k vkns’kks a ds vuqikyu ds fcuk ,ls s fdlh Hkh viz;qDr vk;krkas ;k vk;kfrr fufof"V;kas ds lkFk fufeZr mRiknks a dks fu;kZr nkf;Ro dh iwfrZ es a pwd ds fu;fer gksu s ds ckn Hkh MhVh, es a LFkkukra fjr ugha fd;k tk,xkA bl iSjk ds iz;kts u 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 es a flvkus @rnFkZ ekunMa kas ds vuqlkj 'kkfey ugha fd;k x;k gSA ?k½ viz;qDr vk;kr dks fuEukuqlkj fofu;fer fd;k tk,xk % i. viz;qDr lkexzh dks {ks=kf/kdkj izkIr th,lVh@lhek’kqYd izkf/kdkfj;kas dh mifLFkfr esa u"V dj fn;k tk,xk tks eky dks u"V fd, tkus dks izekf.kr djsxa s ;k bldk iqu% fu;kZr fd;k tk ldrk gS( ii. blds vfrfjDr] oLrqvkas ds mn~xe ds ckotwn ,ls s viz;qDr vk;kr lhek@’kqYd izkf/kdkfj;kas dks NwV izkIr lkexzh ij C;kt ds lkFk eksLV QsoMZ us’ku ds vk/kkj ij izHkkfor 'kqYd dk Hkqxrku dju s gsrq ik= gksxk vkSj blds lkFk gh 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 nsxkA ¼³½ xq.koÙkk fu;a=.k vkns’kksa ls NwV dsoy okLrfod fu;kZrkas ds fy, miyC/k gS vkSj ,slh NwV vfxze izkf/kdkj i= /kkjdkas ds fy, ekU; fu;kZrkas gsrq vuqer ugh gksxhA ¼p½ izfØ;k iqLrd ¼,pchih½] 2023 ds iSjk 4-36 ds rgr Dyfcax dh lqfo/kk miyC/k ugha gksxhA ¼N½ ,ls s izkf/kdkj i=kas ds fy, bZvks vof/k izfØ;k iqLrd ds iSjk 4-40 ds vuqlkj gksxhA rFkkfi fu;kZr nkf;Ro vof/k oL= mRiknks a gsrq D;wlhvk s NwV ds lac/a k es a vk;kr [kis dh fudklh dh frfFk ls 180 fnuka s ds fy, izfrcfa/kr gSA ¼t½ Mh,QvkbZ, Ldhe ds rgr vfuok;Z D;wlhvks gsrq vuqikyu ds fcuk fufof"V;ks a dk vk;kr vuqer ugha gSA ¼>½ ;g NwV vkxs fons’k O;kikj uhfr ds iSjk 2-03 ¼x½ ds v/khu gS% ii : ¼i½ 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 vkns’k ¼D;wlhvks½ dh Ikz;ksT;rk ls NwV iznku dh tk,xh tks fu;kZr mRiknu ds fy, visf{kr gSA ,ls h fufof"V ;k ,ls h fufof"V;ks a ls fufeZr oLrqvks a dh fdlh MhVh, fDy;jUs l dh vuqefr ugha gSA vk;kr ds le; bZvks;w bdkb;kas }kjk lhek’kqYd izkf/kdkfj;ksa dks 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 xq.koRrk 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;kZrks a grs q vuqer ugh gksxhA ;g NwV vkxs fon’s k O;kikj uhfr ds iSjk 2-03 ¼x½ ds v/khu gSA iii½ ,lbZtsM ds fy,: ¼i½ fufof"V ds vk;kr ij ,lbZtsM dks chvkbZ,l vf/kfu;e] 2016 ds rgr tkjh vfuok;Z xq.koÙkk fu;a=.k vkns’k ¼D;wlhvks½ dh Ikz;ksT;rk ls NwV iznku dh tk,xh tks fu;kZr mRiknu ds fy, visf{kr gSA ,ls h[भाग II—खण् ड 3(ii)] भारत का रािपत्र : असाधारण 3 fufof"V ;k ,ls h fufof"V;kas ls fufeZr oLrqvksa dh fdlh MhVh, fDy;jsUl dh vuqefr ugha gSA vk;kr ds le; ,lbZtsM bdkb;ks a }kjk ,lbZtsM ds lacfa/kr fodkl vk;qDr dks ,d 'kiFk i= izLrqr fd;k tk,xkA xq.koÙkk fu;a=.k vkn’s kkas ls NwV dsoy okLrfod fu;kZrkas ds fy, miyC/k gSA ;g NwV vkxs fon’s k O;kikj uhfr ds iSjk 2-03¼x½ ds v/khu gS^^A 3- fuEufyf[kr mi iSjk ¼x½ fons’k O;kikj uhfr 2023 ds ekStwnk iSjk 2-03 esa tkMs +k x;k gS% ^^¼x½ ea=ky;ksa@foHkkxks a dh lwph ftudh vf/klwpuk vfuok;Z xq.koÙkk fu;a=.k vkns’kkas ij gS] ftUgs a fu;kZr mRiknka s ds fofuekZ.k es a mi;ksx@miHkksx dh tkus okyh oLrqvkas ds fy, Mhth,QVh n~okjk NwV nh xbZ gS] fon’s k O;kikj uhfr] 2023 ds ifjf’k"V 2e es a nh xbZ gS^^A bl vf/klwpuk dk izHkko% vfxze izkf/kdkj i= /kkjdksa] bZvk;s w bdkb;ks a vkSj ,lbZtsM }kjk vk;kfrr fufof"V;kas 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;kas@foHkkxkas [vFkkZr bLikr ea=ky;] m|ksx lao/kZu vkSj vkra fjd O;kikj foHkkx ¼MhihvkbZvkbZVh½ vkSj oL= ea=ky;] dh lwph dks fon’s k O;kikj uhfr] 2023 ds ifjf’k"V 2e es a vf/klwfpr fd;k x;k gSA [फा. स.ं 01@89@180@13@,,e&15@ihlh&2[d]@bZ&5910] lark"sk dqekj lkjxa h] 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 11th March, 2024 No. 71/2023 Subject:- Enabling provisions for import of inputs that are subjected to mandatory Quality Control Orders (QCOs) by Advance Authorisation holders, EOU and SEZ. S.O. 1251(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 and 2.03 of the Foreign Trade Policy (FTP), 2023, the Central Government hereby makes the following amendments to FTP, 2023 with immediate effect, in supersession of Notification No. 69/2023 dated 07.03.2024. 2. A new para 2.03 (A) is inserted below para 2.03 of FTP 2023, as follows: “2.03A Importability of items under Advance Authorisation/EOU/SEZ without compliance to the mandatory Quality Control Orders (QCOs) Import of Inputs under Advance Authorisation/EOU/SEZ without compliance to the mandatory QCOs, shall be subjected to the following conditions: i) For Advance Authorisation: a) 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. b) 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. c) 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.4 THE GAZETTE OF INDIA : EXTRAORDINARY [PART II—SEC. 3(ii)] d) The unutilised imports shall be regularised as follows: (i) 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; (ii) In addition, such unutilised imports, irrespective of origin of goods, shall be liable to payment of effective duty on MFN basis along with interest on the 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. (e) 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. (f) The facility of clubbing under para 4.36 of Handbook of Procedures (HBP), 2023 shall not be available. (g) The Export Obligation period for such authorizations shall be as per para 4.40 of Handbook of Procedures. However, EO period is restricted to 180 days from the date of clearance of import consignment in respect of QCO exemption for textile products. (h) Import of Inputs without compliance to the mandatory QCOs under DFIA scheme is not allowed. (i) This exemption is further subject to para 2.03 (c) of FTP. ii) For EOUs (i) Exemption from applicability of mandatory QCOs issued under the BIS Act, 2016, shall be provided to EOU on import of inputs which are required for export production. No DTA clearance of such inputs or goods manufactured made out of such inputs, are allowed. 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. 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 subject to para 2.03 (c) of FTP. iii) For SEZ (i) Exemption from applicability of mandatory QCOs issued under the BIS Act, 2016, shall be provided to SEZ on import of inputs which are required for export production. No DTA clearance of such inputs or goods manufactured made out of such inputs, are allowed. An undertaking to that effect will be submitted to the concerned Development Commissioner of the SEZ by the SEZ Unit at the time of importation. The exemption from QCO will be available for physical exports only. This exemption is further subject to para 2.03 (c) of FTP”. 3. The following sub-para (c) 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, EOUs and SEZ from mandatory Quality Control Orders (QCOs). Accordingly, list of Ministries / Departments [ i.e. Ministry of Steel, Department for Promotion of Industry and Internal Trade (DPIIT) and Ministry of Textiles] 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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