4.1.6

Minimum Value Addition

(a) Advance Authorisation necessitates exports with a minimum value addition of 15%, except for items specified in Appendix 11B of HBP v1 and for items in Gems & Jewellery Sector, for which value addition would be as per paragraph 4A.2.1 of HBP v1. Exports to SEZ Units / supplies to Developers / Co-developers, irrespective of currency of realization, would also be covered.

(b) For physical exports for which payments are not received in freely convertible currency, same shall be subject to value addition as specified in Appendix-11 of HBP v1.

(c) In case of Authorisation for import of Tea, minimum value addition under Advance Authorisation shall be 50%.

(d) Similarly, in case of spices {covered by Chapter 9 of ITC(HS)}, duty free import of spices shall be permitted only for value addition purposes like crushing / grinding / sterilization or for manufacture of oils and oleoresins and not for simple cleaning, grading, re-packing etc.