NOTE: Please see Paragraphs 8.36, 9.9, 9.18 and 9.20 of the Policy and paragraphs and 9.22, 9.23, 9.24 and 9.30 of the Handbook of Procedures. I DTA SALE ENTITLEMENT FOR EOU/EPZ UNITS : ----------------------------------------- Paragraphs 8.36, 9.9 of the Export and Import Policy and 9.23 - 9.24 of the Handbook of Procedures provide for sale in DTA by EOU/EPZ/EHTP/STP units. Such sales in the DTA will be governed by the following guidelines:- a) The sale of goods in DTA will be subject to the payment of applicable duties as notified from time to time by the Department of Revenue, Ministry of Finance, Government of India. b) DTA sale entitlement will be applicable only to those goods and services that are approved for manufacture and export in the Letter of Permission/Letter of Intent. No DTA sale will be permissible if such sale is specifically prohibited in the Exim Policy or the Letter of Permission/Letter of Intent. c) Units may opt for DTA sales on a quarterly, half yearly or annual basis by intimation to the Development Commissioner of the EPZ concerned. d) The DTA sales entitlement shall be availed of within three year of the accrual of entitlement. e) An application for sale of goods, rejects, waste, scrap and remnants in DTA as per para 9.9 and 9.20 of the Policy by the EOUs shall be submitted to the Development commissioner of the EPZ concerned in the form given at Annexure-A. The application shall be certified by an independent Cost/Chartered /Cost and Works Accountant and endorsed by the Bond Officer of Customs/Central Excise having jurisdiction over the unit. The Development Commissioner of the EPZ concerned will determine the extent of the DTA sale admissible and issue a goods removal authorization in terms of value . An EPZ unit may effect sale in DTA on the basis of records maintained by it with prior intimation to Customs Authorities. (Above (e) has been amended vide P.N.No.36/(RE-99), Dt.18-10-99) f) DTA sale entitlement shall accrue only after the goods are physically exported during the relevant period as indicated under sub-para (c) above except as provided in sub-para (j) below. However, this requirement may be waived in the case of such goods which, in the opinion of the Development Commissioner of the EPZ concerned, require trial production in order to produce goods of exportable quality. g) Advance DTA sale permission in respect of trial production shall not exceed the entitlement accruable on the exports envisaged in the first year and such sale shall be adjusted against the subsequent entitlements. However, drugs and pharmaceuticals units can make advance DTA sale of trial production on the exports envisaged in the first two years adjustable against subsequent entitlements. The Unit shall be required to execute a bond with the Assistant Commissioner Customs/Central Excise concerned to cover the difference between the amount of duties paid on the advance DTA sale and the full duties applicable on such goods. h) Advance DTA sales permission would also be admissible in respect of trial production in cases of capacity expansion/ product diversification. In such cases, the unit would be entitled to advance DTA sales linked to the expanded capacity created by establishment of new production streams or installation of balancing equipment or through product diversification . However, no advance DTA sale would be admissible to a DTA unit converted into EOU except in respect of new production stream or trial production as a result of change of technology. i) The DTA sale entitlement would accrue if the NFEP achieved by the unit is not less than the minimum stipulated level in the Appendix-I of the Policy . j) EOUs engaged in the manufacture of perishable items like floriculture, horticulture, pisciculture can also avail the facility of simultaneous sale in DTA of such perishable items on quarterly basis, while earning DTA entitlement on exports made during the said quarter. Such permission can be granted in advance by the DC concerned subject to the condition that the unit has achieved positive NFE upto the previous quarter. k) Deleted. l) Units in the service sector can also avail DTA sale as per procedure mentioned above. m)Deleted n)Deleted (Above (m) & (n) has been deleted vide P.N.No. 22/(RE-00), Dt.20/7/2000) II. SALE OF GEM & JEWELLERY PRODUCTS: a) DTA sale of Gem & Jewellery items will be permitted on annual basis by the Development Commissioners upto 10% of FOB value of exports during the preceding year subject to following conditions: b) The application will be submitted to DC of EPZ concerned on yearly basis (licensing-year)giving the details of production and exports made during the preceding licensing year duly certified by a Chartered Accountant and endorsed by the jurisdictional Custom Authority. However an EPZ unit may effect sale in DTA on the basis of records maintained by it with prior intimation to Customs authorities. c) The DTA sale of plain jewellery shall be permitted on payment of concessional rate of duty in Indian Rupees as applicable to sale from nominated agencies. In respect of studded jewellery, duty shall be payable in Indian Rupees as notified by Customs. (Above c has been amended vide P.N. No.70(RE-98), Dt. 5/2/99) III. OTHER SALES IN DTA: The following guidelines shall apply to the sale of goods in the DTA in respect of supplies specified in paragraph 9.10 of the Export and Import Policy and paragraph 9.25 of the Handbook of procedures: a) The unit shall, at the time of application, indicate the quantity and value of goods sought to be supplied in the DTA. If the sale is effected against an import license held by the DTA purchaser, the Customs/Central Excise Officer concerned will allow such sales after making a suitable entry on the license of the quantity and value of such sales permitted by the Development Commissioner. The Import license shall cease to be valid for further imports to the extent of such supplies effected by units. b) If, the goods proposed to be sold by the units do not require an import license, the Customs/Central Excise Officer concerned will allow such supplies from the unit to the DTA. c) Goods supplied under (a) and (b) above will be taken into account for the purposes of discharging export obligation and achievement of NFEP. The unit will file a quarterly statement to the Development Commissioner giving details of the goods cleared in the DTA category wise. IV. SALE OF REJECTS/SCRAP/WASTE/REMNANTS Sale of rejects will be allowed in the DTA, as provided for in para 9.9(a) of the Export and Import Policy and para 9.22 of the Handbook of Procedures. Sale of scrap/waste and remnants would be as per provisions of para 9.20 of Exim Policy and para 9.30 of Handbook of Procedure. V. SALE OF BY-PRODUCTS: The sale of by-products in the DTA may be allowed as per provision of para 9.9 of the Policy without inclusion of the item in LOP/LOI . VI. DATE SALE BY SEZ UNITS: a) Units may opt for DTA sales on quarterly, half yearly or annual basis by intimation to the Development Commissioner of the concerned SEZ. b) DTA sale can be claimed after achieving NFEP as per Appendix-I of Exim Policy under intimation to Development Commissioner/Customs Authorities. c) Advance DTA sale will require prior approval of the concerned Development Commissioner. ANNEXURE - A APPLICATION FOR DTA SALE PERMISSION UNDER PARA 9.9(b) OF THE EXIM POLICY 1997-2000 FOR THE PERIOD (QUARTERLY/HALF YEARLY/ANNUAL) I. PROJECT DETAILS: 1. Name & Address of the unit: 2. LOI/LOP/IL No. & Date: -------------------------------------------------------------- 3. Details of the Items of Present products approved manufacture/ Installed for manufacture Services Capacity and export in the LOP/LOI/IL -------------------------------------------------------------- 1. 2. 3. -------------------------------------------------------------- 4. Date of commencement of production: II DETAILS OF ADVANCE DTA SALE ------------------------------------------------------------- 5. Details of | Approval |Particulars of | Value advance | No. and Date |products/Services | DTA sale | |Permitted | permitted | | | if any | | | -------------------------------------------------------------- 1) 2) 3) -------------------------------------------------------------- Total -------------------------------------------------------------- DETAILS OF DISPATCH -------------------------------------------------------------- 6. Details of advance |Description of goods/ | Value DTA sale effected |service sold in DTA as | (Please indicate the |advance DTA sale Quantity| period) -------------------------------------------------------------- 1. 2. 3. Total -------------------------------------------------------------- III. PRODUCTION DETAILS FOR THE APPLICATION PERIOD (a) Gross production --------------------------------------------------------------------- I Description of |Total Production Including goods produced/|Rejects and waste/scrap Manufactured/ |---------------------------------------------- services |Quantity | Ex-factory Value --------------------------------------------------------------------- (1) | 2(i) | 2(ii) --------------------------------------------------------------------- 1. 2. Total ---------------------------------------------------------------------- IV DETAILS OF PHYSICAL EXPORTS FOR THE APPLICATION PERIOD ----------------------------------------------------------------------- Quantity FOB value of |value of rejected |Net FOB value of Physical Exports |consignment,if any|Physical Exports ----------------------------------------------------------------------- 5(i) 5(ii) | 5(iii) |5(iv)=[5(ii)-5(iii)] ----------------------------------------------------------------------- 1. 2. 3. ----------------------------------------------------------------------- Total ----------------------------------------------------------------------- V.NET FOREIGN EXCHANGE EARNINGS AS A PERCENTAGE OF EXPORTS(NFEP) -------------------------------------------------------------- NFEP achieved on exports in the five years or less as applicable (calculation chart enclosed) -------------------------------------------------------------- -------------------------------------------------------------- VI PARTICULARS OF PROPOSED DTA SALE -------------------------------------------------------------- Description of the | Value items proposed | to be sold in DTA | -------------------------------------------------------------- 9(i) | 9(ii) -------------------------------------------------------------- 1. 2. 3. Total -------------------------------------------------------------- DECLARATION ------------- I/We hereby declare that the information given above is true and correct Signature of the applicant Name Designation Seal of the Company CHARTERED ACCOUNTANTS CERTIFICATE We have checked and verified the figures mentioned above from the records and books of account of company and found them true and correct Signature Name Membership No Seal CERTIFICATE BY CENTRAL EXCISE AUTHORITY --------------------------------------------- Verified from the records and found correct by Inspector / Supdt. Of Central Excise & Customs I/C of the factory Signature Name Seal Note: Each page may be verified and signed by the Chartered Accountant -------------------------------------------------------------- CALCULATION CHART (TO BE CERTIFIED BY A CHARTERED ACCOUNTANT SHOWING NFEP --------------------------------------------------------------------------- ACHIEVED IN THE LAST FIVE YEARS OR LESS AS APPLICABLE ----------------------------------------------------- 1. DETAILS OF PHYSICAL EXPORTS: (Rs. in Lakhs) ------------------------------------------------------------------------------------------- i) F.O.B. value of physical exports made Rs. in the last five years or less as applicable ii) Value of Supplies made under para 9.10 of the exim policy iii) Total Rs. 2. DETAILS OF CAPITAL GOODS INCLUDING DG SET AND OTHER OFFICE EQUIPMENTS IMPORTED IN THE LAST FIVE YEARS OR LESS AS APPLICABLE ---------------------------------------------------------------------------- (I) CIF VALUE OF IMPORTED CAPITAL GOODS (YEAR WISE) IN THE LAST FIVE YEARS OR LESS AS APPLICABLE ------------------------------------------------------------------------------ Ist year IInd year IIIrd year IVth year Vth year VIth year ------------------------------------------------------------------------------ -------------------------------------------------------------------------------------- (II)VALUE OF IMPORTED CG PROCURED FROM ANOTHER EOU/EPZ UNIT OR FROM A LEASING COMPANY IN THE LAST FIVE YEARS OR LESS AS APPLICABLE --------------------------------------------------------------------------------------- Ist year IInd year IIIrd year IVth year Vth year VIth year --------------------------------------------------------------------------------------- -------------------------------------------------------------------------------------- 3. AMORTISED VALUE OF CAPITAL GOODS Rs. (Please see Note below for calculation) --------------------------------------------------------------------------------------- -------------------------------------------------------------------------------------- 4. DETAILS OF IMPORTED RAW MATERIAL Rs. (i) Total CIF value of imported raw materials, consumables including POL products and components etc. in the last five years or less applicable --------------------------------------------------------------------------------------- (ii) Value of purchases made under Para Rs. 9.10(c), 9.16 of EXIM Policy in the last five years or less applicable --------------------------------------------------------------------------------------- (iii) Value of goods indicated at (i) & Rs. (ii) above held in stock at the end of the relevant period --------------------------------------------------------------------------------------- (iv) Value of goods at (i) & (ii) above, Rs. which are under process and/or have been used in production of the goods lying in stock -------------------------------------------------------------------------------------- (v) Value of raw materials etc. used in Rs. goods produced and cleared from the unit {[(i) + (ii)]-[(iii)+(iv)]} ------------------------------------------------------------------------------------- ------------------------------------------------------------------------------------- 5. Total value of indigenous raw materials, consumables Rs..________________ components etc, used in goods produced and cleared from the unit in the last five years or less as applicable 6. OTHER OUTFLOW OF FOREIGN EXCHANGE IN THE LAST FIVE YEARS OR LESS AS APPLICABLE ---------------------------------------------------------------------------------- (i) Dividends Rs. (ii) Profit Rs. (iii) Technical know how fee Rs. (iv) Royalty Rs. (v) Commission Rs. (vi) Foreign travel Rs. (vii) Any other outflow in foreign exchange(Please indicate details) Rs. Total Rs. 7. NFEP achieved A - B --------- x 100 A Where A = FOB value of exports B = Sum total of value of imported inputs used. Proportionate (amortised) value of imported capital goods, technical know-how fee and other expenses made in foreign exchange Note: The proportionate (amortised) value of imported capital goods and technical know-how fee shall be calculated @ 20% of the CIF value of each year in the last five years or less as applicable. (Above Annexure I has Been Amended Vide Public Notice No.29(RE-00)/1997-2002 Dated 1-9-2000)