3.18

a. Service providers (other than hotels and service providers in the tourism sector fulfilling the criteria mentioned in paragraph 9.47 of the Policy shall be entitled to duty free credit for imports equivalent to 10% of the average foreign exchange earned by them in the preceding three licensing years. However, hotels (one star and above), heritage hotels, stand-alone restaurants and other service providers in tourism sector approved and registered with Department of Tourism, Govt. of India, shall be entitled to duty free imports equivalent to 5% of the average foreign exchange earned by them in the preceding three licensing years. For one & two star hotels and stand-alone restaurant, the free foreign exchange earned through international credit cards only shall be taken into account for the entitlement under the scheme and the same would be vetted through a bankers statement that forms part of the application under Appendix 36A.

b. All categories of Service providers will be entitled for benefits under the scheme subject to achieving a minimum total free foreign exchange of Rs 30 lakhs in the preceding 1/2/3 licencing years.

c. The duty free credit entitlement certificate shall be used for import of any capital goods including spares, office equipment(s) & professional equipment(s), office furniture(s) & consumables provided such goods are freely importable under ITC(HS). However, import of agricultural products, dairy products, motor cars, sports utility vehicles and all purpose vehicles shall not be allowed even if such items are freely importable under ITC(HS).

d. The benefit under this scheme is subject to actual user condition. The duty free credit entitlement certificate and the goods imported thereunder shall be non-transferable.

e. A single consolidated application for the duty free credit entitlement certificate shall be filed with the jurisdictional regional licensing authority in Appendix-36A by the Registered office in case of a company and Head Office in case of others. The last date for filing of such application shall be 31st March of the licencing year succeeding the licencing year on the basis of which entitlement is claimed.

(Above e. has been amended vide PN. NO. 53(RE-03), DT. 27/02/2004)

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e. A single consolidated application for the duty free credit entitlement certificate shall be filed with the jurisdictional regional licensing authority in Appendix-36A by the Registered office in case of a company and Head Office in case of others. The last date for filing of such application shall be 31st December. ]

f. Where the applicant is the branch office or the individual units of the service provider, it shall furnish (i) self certified copy of any valid documentary evidence such as tax return etc. Where the name of the branch/unit is given and (b) an authority letter from the Registered Office of a company or head office of a firm, clearly, indicating that the Registered/Head office or its branches and unit(s) have not been declared defaulter or otherwise made in eligible for import/export under any of the provisions of the policy.

g. The Applicant can apply for split up of licence subject to the condition that each such licence will be of a minimum value of Rs.5 Lakhs and the applicant will be required to pay additional fee of Rs.1000/- per split up licence in addition to the application fee for the duty free entitlement certificate as per Appendix-29 of Handbook of Procedure. The request for split up licence shall be entertained only at the time of submission of initial application.

h. The certificate holder intending to procure the item (s) from the indigenous sources/State Trading Enterprises in lieu of direct import has the option to source them against Advance Release Order (ARO) or invalidation letter, as the case may be, which shall be denominated in foreign exchange/Indian Rupees.

i. The entitlement can be used for import from private/public bonded warehouses subject to the fulfillment of provision of paragraph 2.28 of Exim Policy and the terms and conditions of the notification issued by Department of Revenue from time to time in respect of private/public bonded warehouses.

j. The duty free entitlement certificate shall be valid for a period of 12 months. The service provider shall within one month of the completion of imports made or the expiry of the validity of the duty free entitlement certificate whichever is earlier, submit a statement of imports made under the certificate as per Appendix-36B to the jurisdictional Regional Licensing Authority with a copy to the jurisdictional Excise authorities (service tax cell).

(Above para 3.18 has been amended vide PN. No. 40/2003, DT. 28/01/2004)

k. All the applicants under this scheme who are hotels ( 1 star and above, heritage hotels) and stand alone restaurants would ensure that they pass on the entire benefit of the duty free credit entitlement to the consumer . This would be confirmed by the submission of an affidavit as per Annexure 1 to Appendix 36 B pertaining to the “Statement of Utilization of Duty Free Credit Entitlement for Status Providers” which can be verified by the licencing authority.

(Above k. has been added vide PN NO. 57/2003, Dt. 31/03/2004)

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a) Service providers (other than hotels and service provider in the tourism sector) fulfilling the criteria mentioned in paragraph 9.47 of the Policy shall be entitled to duty free imports equivalent to 10% of the average foreign exchange earned by them in the preceding three licensing years. However, hotels (having approval as three star or above categories by the Department of Tourism, Government of India) and other service providers in tourism sector registered with Deptt. of Tourism, Government of India shall be entitled to duty free imports equivalent to 5% of the average foreign exchange earned by them in preceding three licensing years.

((a) has been corrected vide PN. NO. 08/2003, DT. 14/05/2003)

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a) Service providers (other than hotels) fulfilling the criteria mentioned in paragraph 9.47 of the Policy shall be entitled to duty free imports equivalent to 10% of the average foreign exchange earned by them in the preceding three licensing years. However, hotels shall be entitled to duty free imports equivalent to 5% of the average foreign exchange earned by them in preceding three licensing years. Accordingly, service providers (other than hotels) and hotels shall be entitled for duty free credit entitlement certificate @10% and 5% respectively of the average value of foreign exchange earned by them in the preceding three licensing years.]

b) The duty free credit entitlement certificate shall be used for import of spares, office equipment(s) and furniture(s), professional equipment(s), and consumables provided such goods are freely importable under ITC(HS). However, import of agriculture and dairy products shall not be allowed even if such items are freely importable under ITC(HS).

c) The duty free credit entitlement certificate and the goods imported thereunder shall be non-transferable.

Application for the duty free credit entitlement certificate shall be filed with the jurisdictional regional licensing authority in Appendix - 36A. The last date for filling of applications shall be 31st December.

The duty free entitlement certificate shall be valid for a period of 12 months. The service provider shall within one month of the expiry of the validity of the duty free entitlemnt certificate, submit a statement of imports made under the certificate as per Appendix - 36B to jurisdictional Regional Licensing Authority. ]

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