1) Advance Licenses under Para 7.5 of H.B:- Attention is invited to paragraph 7.5 of Handbook of Procedures, Volume 1, as amended, which provides for issuance of advance licenses, where SION are not fixed, based on self-declaration and undertaking by the applicants for final adjustment of items with quantities as per norms fixed by ALC .

Difficulties have been experienced in closure of DEEC Book where Ad hoc norms have been fixed by the ALC on content basis or subject to accountability of imported materials in the export product. In this regard it is clarified that Input Output Norms are generally fixed by ALC by giving the absolute quantities of inputs vis-à-vis the quantity of exports. However, it is not always possible to give the absolute quantity of inputs on account of various reasons and in such cases the norms are fixed on content basis or in terms of wastage subject to accountability of imported inputs in the export product. As the norms are fixed by ALC, after issue of advance licenses on self-declaration with the description of export product as applied by the firm, and also often exports are made prior to fixation of norms by the ALC, exporters face difficulty in closure of their cases as some times export product descriptions are modified by ALC to ensure accountability of imported inputs in export product. In this regard it is clarified that the rationale behind modifying the export product description subsequently by the ALC is to ensure accountability of imported inputs in the export product.

To avoid problems at a later stage, advance license applicants applying under para 7.5 of handbook of procedures are advised to give net contents of input incorporated in the export products both in the application as well as in the shipping bills. Even in the standard norms for large number of products, technical characteristics and specifications are required to be indicated both on the import and export sides. These conditions have been specified in the General Notes for various product groups as well as in the foot notes of various standard norms. It is clarified that whatever conditions applied to licenses issued under SION are also applicable for licenses issued under para 7.5. Since norms are confirmed at later stage, it may not be possible to ascertain at the time of application as well as at the time of export or import what sort of conditions are likely to be imposed by ALC. It is always advisable to declare net contents and specifications of export/import items wherever it is possible so that problems will not arise at the time of regularization or closure of licenses.

2) Invalidation of Advance Licenses under para 7.11 of H.B:- Attention of the trade is invited to para 7.11 of Hand Book of procedure (1997-2002). It has been noticed that the license holders are filing applications for invalidation of Advance licenses as covered under the above para after Bond waiver is obtained and/or the exports are completed. It is hereby informed it has been clarified by DGFT that the facility of invalidation of licenses for indigenous procurement is available only on the basis of tie-up agreements with the indigenous supplier and accordingly this facility is available only for procuring the material from indigenous sources before the exports are made. Therefore, the Trade is hereby advised that only requests for invalidation received prior to exports will be entertained by this office. However, in cases where the invalidation request is received after partial exports have been made invalidation will be allowed on pro-rata basis for the remaining portion of the export obligation.

(Pl. refer Trade Notice No. 06/2002, Dt. 02/07/2002 for above the provisions related to invalidation of Advance Licences in this trade Notice stand deleted.)
 

Sd/-
( SUBRAT RATHO )
ZONAL JT.D.G.F.T./ADDITIONAL EXPORT COMMISSIONER
MUMBAI-400020.