Import Licensing Notes

(1) Import of Naptha is free. The provisions as stipulated for import of Naptha for use in the power sector vide Public Notice No.57 (PN)/1997-2002 dated 5th December, 1997 stands withdrawn with immediate effect and the withdrawal will be applicable only prospectively from the date of issue of this Notification. Further, the above change will not alter the position of applicability of the provisions of other statutory provisions relevant to the subject.

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(1) Import of naphtha is free. However, the policy relating to import of naphtha for use as fuel in power sector is as per the public notice given below:

Public Notice No. 57 (PN)/97-02 dated 5th December 1997

Attention is invited to Ministry of Commerce Notification No. 25/97-02 dated 5th December, 1997 according to which import of Naphtha is also permitted by Actual Users as fuel in power sector in accordance with a Public Notice issued in this behalf.

2. In pursuance to the above, import of naphtha/fuel oil shall be permitted by the Independent Power Producers (IPPs) against the import licences issued by the Directorate General of Foreign Trade, Udyog Bhawan, New Delhi subject to the following conditions:-

(i) Import of naphtha by IPPs would require a licence to be granted by Directorate General of Foreign Trade (Headquarters), for which application shall be made in the form prescribed in Appendix 8 of the Handbook of Procedures (Volume 1), 1997-2002.

(ii) The import of naphtha/fuel oil by IPPs shall be subject to Actual User condition and shall be granted by DGFT on the basis of quantity and type of fuel as mentioned in the fuel linkage letter and No Objection Certificate issued by Ministry of Petroleum & Natural Gas. The period of licence shall be as per provisions of Exim Policy. The decision to extend the period of licence beyond the normal period as provided in the Exim Policy shall be taken by the D.G.F.T. in consultation with Administrative Ministry.

(iii) IPPs may submit copies of their applications simultaneously to the Ministry of Power, Ministry of Petroleum & Natural Gas and the oil company through which linkages have been given to them. The oil company shall send its comments within 10 days to the Ministry of Petroleum & Natural Gas and if no comments are received within 10 days on receipt of application from IPP, it will be assumed that oil company has no objection to the proposed imports. Ministry of Petroleum & Natural Gas shall also send its comments within a week on receipt of comments from the oil company to the Ministry of Power and DGFT. Ministry of Power after considering the views/comments of Ministry of Petroleum & Natural Gas shall make their specific recommendations on the IPP application to the DGFT. DGFT will take ppropriate decision on the application for import licence to IPP.

(iv) At the time of actual import, the Customs Authorities at the port of import shall verify and satisfy themselves about the availability of the necessary licence sanctioned by the DGFT and for the purpose of monitoring the compliance of actual user conditions, they may allow the assessment initially on provisional basis subject to finalisation on the basis of submission of proof of end-use. For this purpose, the State Electricity Board (SEB) may be designated as the authority to issue the end-use certificate as the Power Purchase Agreement (PPA) would exist between SEBs and IPPs.

(v) The import can be done only through the ports declared as "Oil Port" under rule - 16 of the Petroleum Rules 1976.

(vi) Disposal of off-spec/unutilised quantity of imports will be allowed to be done only through oil PSUs on terms mutually agreed on commercial basis.

(vii) While granting the licence for import by IPPs, DGFT may stipulate such other conditions which may be necessary to ensure that actual user conditions being strictly observed by the IPPs.

(viii) The IPPs may source an import either directly or through consortium of IPPs (incorporated or unincorporated) or through oil PSUs or through joint venture companies in which an Oil Public Sector Undertaking is a partner.

(ix) The IPPs may tie up for the import with the oil PSUs either under Fuel Management Scheme or through facilitation by the Oil PSUs.

(x) The IPPs may opt to utilise the import terminal/storage facilities of their own, oil PSUs or those of JVs in which an Oil PSU is a partner or of any private party, including foreign company or its JV for import of naphtha/fuel oil.

3. This issues in public interest. ]

(Above Note (1) has been amended vide Ntf. No. 27/2003, DT. 13/01/2004)

(2) Import of SKO shall be allowed through State Trading Enterprises (STEs) i.e. IOC, BPCL, HPCL and IBP for all purposes with STC being nominated as a State Trading Enterprise (STE) for supplies to Advance Licence holders. Advance Licence holders shall however, have the option to import SKO from the above mentioned STEs including STC.

(Above Note No. (2) has been added vide NTF NO. 24/2003, DT. 25/11/2003)

Section V
Cha. 27