3.1

Assistance to States for Developing Export Infrastructure and Allied Activities (ASIDE)

(a) The objective of ASIDE scheme is to establish a mechanism for involving the State Governments to participate in funding of infrastructure critical for growth of exports by providing export performance linked financial assistance to them. The Scheme is administered by Department of Commerce (DoC).

(b) The activities aimed at development of infrastructure for exports can be funded from the scheme provided such activity has overwhelming export content and their linkage with exports is fully established. The specific purposes for which funds can be sanctioned and utilized under the Scheme are as follows:

(i) Creation of new Export Promotion Industrial Parks/Zones (SEZs/Agri. Business Zones) and augmenting facilities in the existing ones.

(ii) Setting up of electronics and other related infrastructure in export conclave.

(iii) Equity participation in infrastructure projects including the setting up of SEZs.

(iv) Meeting requirements of capital outlay of EPIPs/EPZs/SEZs.

(v) Development of complementary infrastructure such as, roads connecting the production centers with the ports, setting up of Inland Container Depots and Container Freight Stations.

(vi) Stabilizing power supply through additional transformers and islanding of export production centre etc.

(vii) Development of minor ports and jetties to serve export purpose.

(viii) Assistance for setting up Common Effluent Treatment facilities and

(ix) Any other activity as may be notified by DoC.

Details of ASIDE Scheme are available at: http://www.commerce.nic.in

3.2

Market Access Initiative(MAI)

(a) Under MAI scheme, Financial assistance is provided for export promotion activities on focus country, focus product basis. Financial assistance is available for Export Promotion Councils (EPCs), Industry and Trade Associations (ITAs), Agencies of State Government, Indian Commercial Missions (ICMs) abroad and other national level institutions/eligible entities as may be notified.

(b) The activities that can be funded under MAI scheme include, amongst others,

(i) Market studies/surveys,

(ii) Setting up of showroom / warehouse,

(iii) Participation in international trade fairs,

(iv) Displays in International departmental stores,

(v) Publicity campaigns,

(vi) Brand promotion,

(vii) Reimbursement of registration charges for pharmaceuticals and expenses for carrying out clinical trials etc., in fulfillment of statutory requirements in the buyer country,

(viii) Testing charges for engineering products abroad,

(ix) Assistance for contesting Anti Dumping litigations etc.

(c) Each of these export promotion activities can receive financial assistance from Government ranging from 25% to 100% of total cost depending upon activity and implementing agency. Full text of guidelines is available at http://commerce.nic.in.

3.3

Marketing Development Assistance (MDA)

(a) Under MDA Scheme, financial assistance is provided for a range of export promotion activities implemented by EPCs and Trade Promotion Organizations on the basis of approved annual action plans. The scheme is administered by DoC. Assistance includes, amongst others, participation in:

(i) Trade Fairs and Buyer Seller meets abroad or in India, and

(ii) Export promotions seminars.

(iii) Financial assistance with travel grant is available to exporters traveling to focus areas, viz., Latin America, Africa, CIS region, ASEAN countries, Australia and New Zealand. In other areas, financial assistance without travel grant is available.

(b) MDA assistance is available for exporters having an annual export turnover as prescribed in MDA guidelines. Full text of guidelines is available at http://www.commerce.nic.in.

3.4

Meeting expenses for statutory compliances in buyer country for Trade Related Matters

DoC may reimburse expenses/charges for fulfilling statutory requirements in the buyer country, including registration charges for product registration for pharmaceuticals, bio-technology and agro-chemicals products on recommendation of EPCs. Financial assistance is also provided for contesting litigation(s) in the foreign country concerning restrictions/anti dumping duties etc. on product(s) of Indian origin, as provided under the Market Access Initiative (MAI) Scheme of DoC. Guidelines are available at http://www.commerce.nic.in.

3.5

Towns of Export Excellence (TEE)

(a) A number of towns have emerged as dynamic industrial clusters contributing handsomely to India’s exports. It is necessary to grant recognition to these industrial clusters with a view to maximize their potential and enable them to move up the value chain and also to tap new markets.

(b) Selected towns producing goods of Rs. 750 Crore or more will be notified as TEE based on potential for growth in exports. However for TEE in Handloom, Handicraft, Agriculture and Fisheries sector, threshold limit would be Rs 150 Crores. The following facilities will be provided to such TEE’s:

(i) Recognized associations of units will be provided financial assistance under MAI scheme, on priority basis, for export promotion projects for marketing, capacity building and technological services.

(ii) Common Service Providers in these areas shall be entitled for EPCG scheme.

(iii) The projects received from TEEs shall be accorded priority by SLEPC (State Level Export Promotion Committee) for financial assistance under ASIDE.

(c) Notified Towns (TEEs) are listed in Appendix 7 of HBPv1.

3.6

Brand Promotion and Quality

(a) IBEF (originally called India Brand Equity Fund and later renamed as India Brand Equity Foundation) was set up by the Ministry of Commerce on 11th July, 1996, with the primary objective to promote and create international awareness of the “Made in India” label in markets overseas. IBEF aims to promote India as a business opportunity by creating positive economic perceptions of India globally as well as effectively present the India business partnerships in a globalised market-place.

(b) DOC provides funds to national level Institutions and EPCs for capacity building, up-gradation of quality, organizing training programs for skill improvement of exporters for quality up-gradation, reduction in rejection and product improvement etc. as provided under the Market Access Initiative (MAI) Scheme of DOC.

Details are available at www.commerce.nic.in

3.7

Test Houses

Central Government will assist in modernization and up gradation of test houses and laboratories to bring them at par with international standards.

Details of scheme are available at www.commerce.nic.in
 

3.8

Quality Complaints/ Disputes

Regional Sub-Committee on Quality Complaints (RSCQC) set up at Regional Offices of this Directorate shall investigate quality complaints received from foreign buyers. Guidelines for settlement of quality and other complaints, in general, are given in Appendix-16 of HBPv1

3.9

Trade Disputes affecting Trade Relations

(a) If anything comes to notice of DGFT or he has reason to believe that an export or import has been made in a manner that

(i) is gravely prejudicial to trade relations of India with any other country; and / or

(ii) is gravely prejudicial to interest of other persons engaged in exports or imports; and / or

(iii) has brought disrepute to the country.

(b) DGFT may take action against such exporter or importer in accordance with FT (D&R) Act, Rules and Orders made there-under and FTP.

3.10

EXPORT AND TRADING HOUSES

3.10.1

Eligibility for Export and Trading Houses Status

Merchant as well as Manufacturer Exporters, Service Providers, Export Oriented Units (EOUs) and Units located in Special Economic Zones (SEZs), Agri. Export Zones (AEZs), Electronic Hardware Technology Parks (EHTPs), Software Technology Parks (STPs) and Bio-Technology Parks (BTPs) shall be eligible for recognition as a status holder.

3.10.2

Status Category

Status recognition depends upon export performance. An applicant shall be categorized as status holder upon achieving export performance indicated in table below. The export performance will be counted on the basis of FOB value of export proceeds realized during current plus previous three years (taken together).For Export House (EH) Status, export performance is necessary in at least two out of four years.
 

3.10.3

Double Weightage and other conditions for Grant of Status

(a) Exporters in Small Scale Industry (SSI) / Tiny Sector / Cottage Sector, Units registered with KVICs / KVIBs, Units located in North Eastern States, Sikkim and Jammu & Kashmir, Units exporting handloom/handicrafts / hand knotted or silk carpets, exporters exporting to countries in Latin America / CIS / sub-Saharan Africa as listed in Appendix-9, Units having ISO 9000 (series) / ISO 14 000 (series) / WHOGMP/ HACCP / SEI CMM level-II and above status granted by agencies listed in Appendix-6 of HBP v1, exports of services and exports of agro products shall be entitled for double weightage on exports made for grant of status. Double Weightage shall be admissible to Merchant as well as Manufacturer Exporters. However, a shipment can get double weightage only once in any one of above categories.

(b) Transfer of export performance from one to another is not permitted. Therefore disclaimer system shall not be allowed for counting of export turnover.

(c) Exports made on re-export basis shall not be counted for recognition.

(d) Exports made by subsidiary of a limited company shall be counted towards export performance of limited company for recognition only if limited company has a majority share holding in subsidiary company.

3.10.4

Privileges of Export and Trading Houses Status Holders

A Status Holder shall be eligible for privileges as under:

(a) Authorization and Customs Clearances for both imports and exports on self-declaration basis;

(b) Fixation of Input-Output norms on priority within 60 days;

(c) Exemption from compulsory negotiation of documents through banks. Remittance / Receipts, however, would be received through banking channels;

(d) Exemption from furnishing of BG in Schemes under FTP;

(e) SEHs and above shall be permitted to establish Export Warehouses, as per DoR guidelines.

(f) For status holders, a decision on conferring of ACP Status shall be communicated by Customs within 30 days from receipt of application with Customs.

(g) As an option, for Premier Trading House (PTH), the average level of exports under EPCG Scheme shall be the arithmetic mean of export performance in last 5 years, instead of 3 years.

(h) Status Holders of specified sectors shall be eligible for Status Holder Incentive Scrip under Para 3 .16 of FTP.

(i) Status Holders of Agri. Sector (Chapter 1 to 24 ) shall be eligible for Agri. Infrastructure Incentive Scrip under VKGUY - Para 3.13.4 of FTP

3.11

SERVICES EXPORTS

3.11.1

Services Exports

(a) All 161 tradable services covered under General Agreement on Trade in Services (GATS) are listed in Appendix 10 of HBP v1. If consideration is received in free foreign exchange, these would be considered as service exports.

(b) All provisions of this Policy shall apply mutatis mutandis to export of services as they apply to goods.

3.11.2

Registration cum Membership Certificate (RCMC) for Service Providers

Software exporters shall register themselves with Electronics and Software EPC. Exporters of 14 specific services listed at Sl. No. 22 of Appendix 2 of HBPv1 are required to register themselves with Services EPC. Other service exporters shall register themselves with Federation of Indian Export Organisations (FIEO).

3.11.3

Common Facility Centers

Government shall promote establishment of Common Facility Centers, in State and District level towns, for use by home-based service providers, particularly in areas like Engineering & Architectural Design, Multi-media operations, Software developers etc. to draw in a vast multitude of home-based professionals into services export arena.
 

3.12

SERVED FROM INDIA SCHEME (SFIS)

3.12.1

Objective

Objective of SFIS is to accelerate growth in export of services so as to create a powerful and unique ‘Served From India’ brand, instantly recognized and respected world over.

3.12.2

Eligibility

Indian Service Providers, of services listed in Appendix 41 of HBPv1, who have free foreign exchange earning of at least Rs. 10 lakhs in current financial year will be eligible for Duty Credit Scrip. For Individual Indian Service Providers, minimum free foreign exchange earnings would be Rs 5 Lakhs.

3.12.3

Ineligible Services and Service Providers

Services and Service Providers as listed in Para 3 .6.1 of HBPv1 shall not be entitled for benefits under the SFIS scheme.

3.12.4

Entitlement

Service Providers of services listed in Appendix 41 of HBPv1 would alone be eligible. Such eligible service providers will be entitled to Duty Credit Scrip equivalent to 10% of free foreign exchange earned during current financial year (w.e.f 1.1.2011). For services rendered prior to 1.1.2011, Appendix 10 of HBPv1 would be applicable. SFIS benefit will be allowed on the Net Foreign Exchange earned.

(Last sentences at para 3.12.4 has been added vide NOTIFICATION NO. 03/2013, DT. 18/04/2013)

3.12.5

Eligible Remittances

Free foreign exchange earned through International Credit Cards and through any instrument as permitted by RBI for rendering of services shall also be taken into account for computation of Duty Credit Scrip.

3.12.6

Imports Allowed

(a) Duty Credit Scrip may be used for import of any capital goods including spares, office equipment and professional equipment, office furniture and consumables; that are otherwise freely importable and / or restricted under ITC (HS). Imports shall relate to any service sector business of applicant.

Service providers who are also engaged in manufacturing activity can use their SFIS scrip for importing / domestic sourcing of capital goods( as defined in para 9.12 of FTP) including spares related to the manufacturing sector business of the service provider. Such manufacturing sector business of the service provider would have to be endorsed on the SFIS scrip from relevant RA.

(Above second paragraph at 3.12.6(a) has been added vide NOTIFICATION NO. 03/2013, DT. 18/04/2013)

(b) Utilization of Duty Credit Scrip shall be permitted for payment of duty in case of import of only those vehicles, which are in the nature of professional equipment to the service provider.

Utilisation of Duty Credit Scrip shall also be permitted for payment of duty in case of Import/ domestic sourcing of motor cars, SUV’s and all purpose vehicles as Professional Equipment by Hotels, Travel agents, Tour operators or tour transport operators and companies owning/operating golf resorts. Such vehicles (operating on road and requiring registration) will have to be registered for Tourist purpose only. Proof of registration will need to be submitted to RA concerned within 6 months of import/domestic procurement.

(Above second paragraph at 3.12.6(b) has been added vide NOTIFICATION NO. 03/2013, DT. 18/04/2013)

(c) Duty Credit Scrip in case of hotels, clubs having residential facility of minimum 30 rooms, golf resorts and stand-alone restaurants having catering facilities, may also be used for import of consumables including food items and alcoholic beverages.

3.12.7

Non Transferability

Entitlement/goods (imported / procured) shall be non transferable (except within group company and managed hotels) and be subjected to Actual User condition. However, these goods can be alienated on completion of 3 years from the date of import / procurement.

(Above Paragraph 3.12.7 has been amended vide NOTIFICATION NO. 30/2013, DT. 01/08/2013)

[OLD- Entitlement /goods (imported / procured) shall be non transferable (except within group company and managed hotels) and be subject to Actual User condition. ]

3.12.8

Procurement from Domestic Sources

Duty Credit Scrip shall be permitted to be utilised for payment of excise duty in terms of DoR notification issued in this behalf for procurement from domestic sources, in respect of items permitted for imports under SFIS Duty Credit Scrip.

3.13

VISHESH KRISHI AND GRAM UDYOG YOJANA (VKGUY) (SPECIAL AGRICULTURE AND VILLAGE INDUSTRY SCHEME)

3.13.1

Objective

Objective of VKGUY is to compensate high transport costs and offset other disadvantages to promote exports of the following products :

(i) Agricultural Produce and their value added products;

(ii) Minor Forest Produce and their value added variants;

(iii) Gram Udyog Products;

(iv) Forest Based Products; and

(v) Other Products, as notified from time to time.

3.13.2

Entitlement

(a) Products listed in Appendix 37A of HBPv1, shall be entitled for Duty Credit Scrip equivalent to 5 % of FOB value of exports (in free foreign exchange) for export made from 27.8.2009 onwards, unless a specific date of export/period is specified by a public notice/notification.

(b) However, for exports made w.e.f 27.8.2009 (unless a specific date of export/ period is specified by a public notice/ notification), some Flowers and Fruits, as listed in Table 1 of Appendix 37A shall be entitled to an additional Duty Credit Scrip equivalent to 2 % of FOB value of exports; over and above the 5 % or 3 % reduced rate VKGUY entitlement as per para 3.13.3 below.

[DELETED - 3.13.3

Applicability of Reduced Rate

Duty Credit Scrip under VKGUY scheme shall be granted only at a reduced rate of 3 % of FOB value of exports in cases where exporter has also availed following benefits:

(i) Drawback at rates higher than 1%; and/or

(ii) Specific DEPB rate (i.e. other than Miscellaneous Category – Sr. Nos. 22 C & 22 D of Product Group 90); and/or

(iii) Advance Authorization or Duty Free Import Authorization for Import of inputs (other than catalysts, consumables and packing materials) for the export product for which Duty Credit Scrip under VKGUY is being claimed.

(Para 3.13.3 has been Deleted vide NOTIFICATION NO. 03/2013, DT. 18/04/2013)

3.13.4

Agri. Infrastructure Incentive Scrip

(a) Status Holders (having status recognition for the current year) exporting products covered under ITC HS Chapters 1 to 24 , shall be granted Duty Credit Scrip equal to 10% of FOB value of agricultural exports (including VKGUY benefits entitled under Policy Para 3.13.2) for exports made during a particular year. This shall be subject to the condition that the total benefits for all status holders put together does not exceed Rs 100 Cr (i.e. Rs 50 Cr for each half year) and the conditions specified in Para 3.7.2 of HBPv1 are satisfied.

(b) Zonal Office, CLA, New Delhi shall be the licensing office for grant of Duty Credit Scrip to all status holders under this para.

(c) The following capital goods / equipments shall be permitted for import:

(i) Cold storage units (including Controlled Atmosphere (CA) and Modified Atmosphere (MA) Stores); Precooling Units and Mother Storage Units for Onions, etc.;

(ii) Pack Houses (including facilities for handling, grading, sorting and packaging etc.); for items notified in Appendix 37 F.

(iii) Reefer Van / Containers; and

(iv) Other Capital Goods / Equipment as may be notified in Appendix 37 F.

(d) Imported capital goods/equipment shall be utilized for storage, packing etc. (as in (ii) above) and transportation of agricultural products (including agro-processed perishable products).

(e) This additional benefit shall be subject to actual user condition and hence non-transferable.

(f) For import of Cold Chain Equipment this Scrip shall be freely transferable amongst Status Holders as well as to Units (the term ‘Units’ shall not include Developers) in the Food Parks.

(g) Transferability of the Agri Infrastructure Incentive Scrip shall be allowed to supporting manufacturer of the status holder. Such transferability would have to be endorsed on the Agri Infrastructure Incentive Scrip from relevant RA.

(Above sub-para (g) has been added vide NOTIFICATION NO. 03/2013, DT. 18/04/2013)

3.14

FOCUS MARKET SCHEME (FMS)

3.14.1

Objective

Objective of FMS is to offset high freight cost and other externalities to select international markets with a view to enhance India’s export competitiveness in these markets.

3.14.2

Entitlement

(a) Exporters of all products to countries notified in Table 1 and 2 of Appendix 37C of HBPv1 shall be entitled for Duty Credit Scrip equivalent to 3 % of FOB value of exports (in free foreign exchange) for exports made from 27.8.2009 onwards, unless a specific date of export/period is specified by a public notice/notification.

(b) Export of products to countries notified in Table 3 of Appendix 37 C of HBP v1 will be entitled for additional Duty Credit Scrip @ 1% of FOB value of exports (in free foreign exchange) for export made with effect from 01.04.2011.

3.14.3

Ineligible Exports Categories / Sectors for FMS

The following categories of export products / sectors shall be ineligible for Duty Credit Scrip, under FMS:

(i) Supplies made to SEZ units;

(ii) Service Exports;

(iii) Diamonds and other precious, semi precious stones;

(iv) Gold, silver, platinum and other precious metals in any form, including plain and studded Jewellery;

(v) Ores and Concentrates, of all types and in all forms;

(vi) Cereals, of all types;

(vii) Sugar, of all types and in all forms;

(viii) Crude / Petroleum Oil & Crude / Petroleum based Products covered under ITC HS codes 2709 to 2715, of all types and in all forms; and

(ix) Export of Milk and Milk Products covered under ITC HS Codes 0401 to 0406, 1 9011 001, 1 9011 010, 2105 & 3501.

(x) Export of Meat and Meat Products.

(Above sub para (x) has been added vide NOTIFICATION NO. 27/2012, DT. 28/12/2012)

(xi) Export of Cotton.

(xii) Export of Cotton Yarn.

(xiii) Exports which are subject to Minimum Export Price or Export Duty.

(Above categories from  (xi) to (xiii) has been added vide NOTIFICATION NO. 43/2013, DT. 25/09/2013)

3.14.4

Incremental Exports Incentivisation Scheme

Objective

(a) The objective of the Scheme is to incentivize incremental exports.

Entitlement

(b) An IEC holder would be entitled for a duty credit scrip @ 2% on the incremental growth (achieved by the IEC holder) during the period 01.01.2013 to 31.3.2013 compared to the period from 01.01.2012 to 31.3.2012 on the FOB value of exports. Incremental growth shall be in respect of each exporter (IEC holder) without any scope for combining the exports for Group Company.

(c) Incentive will be admissible only if the IEC holder has achieved growth in the financial year 2012-2013 vis a vis financial year 2011-2012. Quantum of benefit will be calculated on the incremental growth achieved subject to eligibility criteria given in para 3.14.4(d) of FTP 2009-14 .

(i) Benefit of Incremental Export Incentivisation Scheme for the last quarter of 2012-13 will be limited to 25% growth or Incremental growth of Rs. 10 crores in value, whichever is less.

(ii) Claims in excess of this value will be subjected to greater scrutiny by Regional Authority.

(Above sub-paragraphs (i) & (ii) at (c) has been added vide NOTIFICATION NO. 44/2013, DT. 25/09/2013)

Eligibility Criteria

(d) For the purpose of the scheme, export performance shall not be allowed to be transferred from any other IEC holder. Benefit under this scheme will not be allowed to an exporter who had made no export between 01/01/12 to 31/03/12 .The following exports shall not be taken into account for calculation of export performance or for computation of entitlement under the Scheme:

(i) Export of imported goods or exports made through trans-shipment.

(ii) Export from SEZ/ EOU /EHTP /STPI /BTP/FTWZ

(iii) Deemed Exports

(iv) Service Exports

(v) Third Party exports

(vi) Diamond, Gold, Silver, Platinum, other precious metal in any form including plain and studded jewellery and other precious and semi-precious stones.

(vii) Ores and concentrates of all types and in all formations.

(viii) Cereals of all types.

(ix) Sugar of all types and all forms.

(x) Crude / petroleum oil and crude / primary and base products of all types and all formulations.

(xi) Export of milk and milk products.

(xii) Export performance made by one exporter on behalf of other exporter.

(xiii) Supplies made to SEZ units.

(xiv) Items, export of which requires an export authorisation (except SCOMET), will not be considered.

(xv) Export of Meat and Meat Products.

(xvi) Exports to Singapore, UAE and Hong Kong.

Special Provision

(e) The scheme is region specific and will cover exports to USA, Europe and Asian countries only. Disclaimer provisions of para 3.17.10 (b) of FTP shall not be admissible. This benefit will be over and above any benefit being claimed by the exporter under any of the Chapter 3 Schemes, therefore, provisions of para 3.17.8 of FTP 2009-14 will not be invoked for such benefit.

Utilisation of Scrip

(f) The duty credit scrip will be freely transferable. Such scrips shall also be eligible for domestic sourcing as per para 3.17.5 of FTP 2009-14.

(Above new para 3.14.4 has been added vide NOTIFICATION NO. 27/2012, DT. 28/12/2012)

3.14.5

Incremental Exports Incentivisation Scheme (IEIS) on annual basis

Entitlement

(a) Objective of the Scheme is to incentivize incremental exports.

(b) An IEC holder would be entitled for a duty credit scrip @ 2% on the incremental growth (achieved by the IEC holder) during the current year (for example, say for the period 01.04.2013 to 31.3.2014) compared to the previous year (for example, say for the period from 01.04.2012 to 31.3.2013) on the FOB value of exports. Incremental growth shall be in respect of each exporter (IEC holder) without any scope for combining the exports for Group Company.

(c) Incentive will be admissible only if the IEC holder has achieved growth in the financial year 2013-2014 vis a vis financial year 2012-2013. Quantum of benefit will be calculated on the incremental growth achieved subject to eligibility criteria given in para 3.14.4(d) of FTP 2009-14.

(i) Benefit of Incremental Export Incentivisation Scheme for the year 2013-14 will be limited to a scrip of a value not exceeding Rs. 1 Crore per IEC.

(ii) Claims in excess of this value will be subjected to greater scrutiny by Regional Authority.

(Above sub-paragraphs (c)(i) & (c)(ii) has been added vide NOTIFICATION NO. 43/2013, DT. 25/09/2013)

Eligibility Criteria

(d) For the purpose of the scheme, export performance shall not be allowed to be transferred from any other IEC holder. Benefit under the scheme will not be allowed to an exporter who had made no export during fiscal year 2011-12 and fiscal year 2012-13. The following exports shall not be taken into account for calculation of export performance or for computation of entitlement under the Scheme:

(i) Export of imported goods or exports made through trans-shipment.

(ii) Export from SEZ/ EOU /EHTP /STPI /BTP/FTWZ

(iii) Deemed Exports

(iv) Service Exports

(v) Third Party exports

(vi) Diamond, Gold, Silver, Platinum, other precious metal in any form including plain and studded jewellery and other precious and semi-precious stones.

(vii) Ores and concentrates of all types and in all formations.

(viii) Cereals of all types.

(ix) Sugar of all types and all forms.

(x) Crude / petroleum oil and crude / primary and base products of all types and all formulations.

(xi) Export of milk and milk products.

(xii) Export performance made by one exporter on behalf of other exporter.

(xiii) Supplies made to SEZ units.

(xiv) Items, export of which requires an export authorisation (except SCOMET), will not be considered.

(xv) Export of Meat and Meat Products.

(xvi) Exports to Singapore, UAE and Hong Kong.

(xvii) Cotton.

(xviii) Cotton Yarn.

(xix) Exports which are subject to Minimum Export Price or Export Duty.

(Above categories (xvii) to (xix) has been added vide NOTIFICATION NO. 43/2013, DT. 25/09/2013)

Special Provision

(e) The scheme is region specific and will cover exports to USA, Europe and Asian countries only. In addition export to 53 countries in Latin America and Africa ( as mentioned in Public Notice 3 dated 18th April 2013 ) will be entitled to this benefit. Disclaimer provisions of para 3.17.10 (b) of FTP shall not be admissible. This benefit will be over and above any benefit being claimed by the exporter under any of the Chapter 3 Schemes.

Utilisation of Scrip

(f) The duty credit scrip will be freely transferable. Such scrips shall also be eligible for domestic sourcing and for payment of Service Tax as per para 3.17.5 of FTP 2009-14.

(Above new para 3.14.5 has been added vide NOTIFICATION NO. 03/2013, DT. 18/04/2013)

3.15

FOCUS PRODUCT SCHEME (FPS)

3.15.1

Objective

Objective of FPS is to promote export of products which have high export intensity / employment potential, so as to offset infrastructural inefficiencies and other associated costs involved in marketing of these products.

3.15.2

Entitlement

(a) Export of products (listed in Table 1 of Appendix 37D of HBPv1) to all countries (including SEZ units) shall be entitled for Duty Credit Scrip equivalent to 2 % or 5% of FOB value of exports (in free foreign exchange) for exports made from 27.8.2009 onwards, unless a specific date of export/period is specified by public notice/notification.

(b) Certain Focus Product(s)/sector(s) listed in Appendix 37D shall be granted bonus benefit in the form of an additional Duty Credit Scrip equivalent to 2% of FOB value of exports (in free foreign exchange) over and above the existing rate for that product/sector from the admissible date of export/period specified in the public notice issued to notify the product/sector.

3.15.3

Market Linked Focus Products Scrip (MLFPS)

Export of Product/Sectors of high export intensity/ employment potential (which are not covered under present FPS List) would be incentivized @ 2 % of FOB value of exports (in free foreign exchange) for exports made from 27.8.2009 onwards, unless a specific date of export/period is specified by public notice/notification, under FPS when exported to the Linked Markets (countries), which are not covered in the present FMS list. Such products are listed in Table 2 of Appendix 37D of HBPv1.

3.16

Status Holders Incentive Scrip (SHIS)

3.16.1

(a) Objective of SHIS is to promote investment in upgradation of technology.

(b) Status Holders of sectors specified in Para 3.16.4 below, shall be entitled to a Duty Credit Scrip @1% of FOB value of exports made during 2009-10 ,2010-11,2011-12 and 2012-13.

(c) Status Holders of additional sectors listed in Para 3.10.8 of HBPv1 2009-14 (RE-2010) shall also be eligible for this Status Holders Incentive Scrip on exports made during 2010-11, 2011-12 and 2012-13.

(d) This shall be over and above any Duty Credit Scrip claimed/availed under this chapter.

3.16.2

Status Holders availing Technology Upgradation Fund Scheme (TUFS) benefits (administered by Ministry of Textiles) during a particular year shall not be eligible for Status Holders Incentive Scrip for exports of that year.

3.16.3

The Status Holders Incentive Scrip will be subject to actual user condition. However transferability will be permitted amongst status holders subject to the condition that the transferee status holder is a manufacturer. Status Holder Incentive Scrip shall be used for import of capital goods (as defined in FTP) relating to sectors specified in Para 3.16.4 below and para 3.10.8 of HBP. Only in respect of CG imported earlier, upto 10% value of the Duty Credit Scrip can be used for import of components, spares/parts of such CG. SHIS can be transferred to a manufacturer group company of the scrip holder even though the group company is not a status holder. Group company is defined in para 9.28 of FTP. Such transfer will have to be endorsed by relevant RA.

(Above Bold section has been added vide NOTIFICATION NO. 03/2013, DT. 18/04/2013)

3.16.4

Status Holders of the following Sectors shall be eligible for the Status Holders Incentive Scrip:

(i) Leather Sector (excluding finished leather);

(ii) Textiles and Jute Sector;

(iii) Handicrafts;

(iv) Engineering Sector (excluding Iron & Steel, Nonferrous Metals in primary or intermediate forms, Automobiles & two wheelers, nuclear reactors & parts and Ships, Boats and Floating Structures);

(v) Plastics; and

(vi) Basic Chemicals (excluding Pharma Products).

3.17

Special Provisions

Common Provisions of Duty Credit Scrip, except where specifically provided for.

3.17.1

(a) Government reserves the right in public interest, to specify export products or services or exports to such countries, which shall not be eligible for computation of entitlement.

(b) Further Government reserves the right to impose / change the rate / ceiling on Duty Credit Scrip under this chapter.

(c) Similarly, Government may also notify goods (in Appendix 37B of HBPv1), which shall not be allowed for import under Duty Credit Scrip.

3.17.2

Ineligible Exports Categories/ Sectors

For VKGUY, FMS, FPS (including MLFPS) and Status Holders Incentive Scrip, the following exports / categories/sectors shall be ineligible for Duty Credit Scrip entitlement:

[DELETED - (i) EOUs / EHTPs / BTPs who are availing direct tax benefits / exemption; ]

(Above para 3.17.2 (i) has been deleted vide NOTIFICATION NO. 03/2013, DT. 18/04/2013)

(ii) Export of imported goods covered under Para 2 .35 of FTP;

(iii) Exports through transshipment, meaning thereby that exports originating in third country but transshipped through India;

(iv) Deemed Exports;

(v) Exports made by SEZ units or SEZ products exported through DTA units; and

(vi) Items, which are restricted or prohibited for export under Schedule-2 of Export Policy in ITC (HS).

3.17.3

Counting of Commission in FOB value of Exports (in free foreign exchange)

FOB Value of Exports (in free foreign exchange) shall include up to 12.5% Foreign Agency Commission for computation of Duty Credit Scrip Benefit.

3.17.4

Free Transferability

(a) Duty Credit Scrip (FPS including MLFPS, FMS and VKGUY) and items imported against it would be freely transferable.

(b) Duty Credit Scrip under SFIS (Para 3.12) shall not be freely transferable.

(c) Status Holder Incentive Scrip shall not be transferable except as permitted under Para 3.16.3 above.

3.17.5

Imports Allowed/Domestic Procurement

(a) Duty Credit Scrip may be used for import of inputs or goods including capital goods, provided same is freely importable and / or restricted under ITC (HS). However, import of items listed in Appendix 37B of HBPv1 shall not be permitted to be debited.

(b) Duty Credit Scrip under Chapter 3 of FTP can also be utilized for payment of duty against imports under EPCG scheme, provided the item is importable against the Scrip.

(c) Duty Credit Scrip can also be utilised for payment of Excise Duty on domestic procurement of such items as permitted to be imported under respective scheme.

(d) Duty credit scrips issued under FPS, FMS and VKGUY can be used for payment of Service Tax. Scrip holder shall be entitled to avail drawback benefits or CENVAT credit of the Service Tax debited in the said scrip in accordance with DOR rules.

(Above sub para (d) has been added vide NOTIFICATION NO. 03/2013, DT. 18/04/2013)

3.17.6

CENVAT / Drawback

Additional customs duty/excise duty paid in cash or through debit under Duty Credit Scrip shall be adjusted as CENVAT Credit or Duty Drawback as per DoR rules, except under SFIS.

3.17.7

TRA Facility

Utilization of Duty Credit Scrip for imports from a port other than port of registration shall be allowed under Telegraphic Release Advice (TRA) facility as per DoR notification.

3.17.8

Exclusivity of Entitlement

Only one benefit under Chapter 3 schemes can be claimed by an exporter for a particular shipment. Benefit under para 3.14.4 of FTP will not be covered under this para.

(The last sentence has been added vide NOTIFICATION NO. 27/2012, DT. 28/12/2012)

3.17.9

Import under Lease financing

Duty Credit Scrip can be utilised for payment of duty in case of import of capital goods under lease financing in terms of provision in Para 2.25 of FTP.

3.17.10

Transfer of Export Performance

(a) Transfer of export performance from one to another shall not be permitted. Thus, a shipping bill containing name of applicant shall be counted in export performance / turnover of applicant only if export proceeds from overseas are realized in applicant’s bank account and this shall be evidenced from BRC / FIRC.

(b) However, for VKGUY, FMS and FPS (including MLFPS), benefits can be claimed either by the supporting manufacturer (along with disclaimer from the company /firm who has realized the foreign exchange directly from overseas) or by the company / firm who has realized the foreign exchange directly from overseas.

3.17.11

Facility of Payment of Customs Duties in case of E.O. defaults

Duty Credit Scrip can also be utilised / debited for payment of Custom Duties in case of EO defaults for Authorizations issued under Chapters 4 and 5 of this Policy. However, penalty / interest shall be required to be paid in cash. Duty credit scrips can be used for payment of composition fee under FTP, for payment of application fee under FTP, if any and for payment of value shortfall in EO under para 4.28 (b) of HBP v1 2009-14.

(Above bold section has been added vide NOTIFICATION NO. 03/2013, DT. 18/04/2013)