Clarification on the applicability of 3% amount on account of non-achievement of minimum Value Addition as mentioned in para 4.49 (b) and amount equivalent to 10% of the CIF value in Para 4.49 (a)(ii) of HBP 2023

By: Admin
May 04, 2024
Categories: DGFT|Notification And Circular
4 Min Read

The DGFT vide Policy Circular No. 02/2024 dated April 03, 2024 has issued Clarification on the applicability of 3% amount on account of non-achievement of minimum Value Addition as mentioned in para 4.49 (b) and amount equivalent to 10% of the CIF value in Para 4.49 (a)(ii) of HBP 2023.

This Directorate is in receipt of some cases seeking relaxation in payment of 3% amount under Para 4.49 (b) and similar provisions of HBP 2023 against Advance Authorisation issued prior to April 01, 2023.

In this regard, attention is drawn towards Para 4.48 (a) of Handbook of Procedure 2023 (Transitional Arrangement for Authorisations issued up to March 31, 2023), which provides that, Advance Authorizations (AA) including Advance Authorizations for Annual Requirement issued up to March 31, 2023 shall be governed by the respective provisions contained in the relevant HBPs, under which the subject AA was issued, excepting provisions relating to clubbing and extension in Export Obligation period.

Accordingly, it is clarified that provisions relating to the payment of 10% of CIF value and 3% of shortfall in FOB value amounts specified in Para 4.49(a) (ii) and 4.49(b) respectively of Handbook of Procedures, 2023 are applicable only in cases where Advance Authorization is issued on or after April 01, 2023.

AAs issued prior to April 01, 2023, will be governed by the relevant provisions of HBP (for the purpose of regularisation of bonafide EO default) under which such AAs were issued.

However, this clarification will not constitute a ground for refund of fees already paid.

The Policy Circular can be accessed at: https://a2z-bucket.s3.ap-south-1.amazonaws.com/Policy_circular_No_02.pd