The Directorate General of Foreign Trade (DGFT) under the Ministry of Commerce and Industry, Government of India, has issued Policy Circular No. 04/2024, dated June 3rd, 2024, introducing a significant relaxation concerning exports to Special Economic Zones (SEZs) under certain schemes. This article delves into the details of this circular, its implications, and the altered submission requirements for exporters.
1. Background: Para 4.21 (iv) of the Foreign Trade Policy (FTP) mandates the submission of the ‘Bill of Export’ for exports to SEZ units/developers/co-developers under specific conditions. This requirement, also applicable to the Duty-Free Import Authorization (DFIA) scheme per Para 4.24 (b) of the FTP, has been a point of contention for exporters.
2. Change in Requirements: DGFT has received representations from the industry highlighting the challenges exporters face in meeting this requirement. In response, the Competent Authority, empowered under Para 2.59 of the FTP, has decided to relax the submission of the ‘Bill of Export’ for exports made to SEZ units/developers/co-developers under Advance Authorization/DFIA before July 1st, 2017.
3. Corroborative Evidence: Exporters, for exports made to SEZ units/developers/co-developers before July 2017, are now allowed to submit alternative corroborative evidence instead of the ‘Bill of Export’. This evidence includes:
- ARE-1 attested by jurisdictional Central Excise/GST Authorities of AA holder/DFIA Exporter
- Evidence of receipt of supplies by the SEZ recipient
- Evidence of payment made by the SEZ unit to the AA/DFIA exporter
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Government of India
Ministry of Commerce and Industry
Department of Commerce
Directorate General of Foreign Trade
Vanijya Bhawan, Akbar Road, New Delhi
Policy – 4 Division
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Policy Circular No. 04/2024-DGFT | Dated: 3rd June 2024
To
All Regional Authorities of DGFT
All Exporters/Members of Trade
All Custom Authorities
Subject: Relaxation in the provision of submission of ‘Bill of Export’ as evidence of export obligation discharge for supplies made to SEZ units in case of Advance Authorisation.
Para 4.21 (iv) of FTP specifies that the authorisation holder needs to file Bill of Export for export to SEZ unit/developer/co-developer in accordance with the procedures given in SEZ Rules. As per Para 4.24 (b) of FTP the above Para 4.21 shall apply to DFIA also.
2. In line with above FTP provision, in case of supplies made to SEZ units under Advance Authorisation/DFIA, Sl. No.2(a)(ii) of ‘Guidelines for Applicants’ in ANF-4F (Application for Redemption) and Sl. No.5(b) of ‘Guidelines for Applicants’ in ANF-4G (Application for Transferable DFIA) prescribe the following documents:
“…EP copy of the shipping bill(s) containing details of shipment effected or bill of export in case of export to SEZ…”
3. This Directorate is in receipt of representations from Industry highlighting hardships to Exporters in complying with this requirement. This issue has been examined. In exercise of powers vested with the Competent Authority in terms of Para 2.59 of the FTP, it has been decided to relax this requirement of submission of ‘Bill of Export’ in case of exports made to SEZ unit/developer /co-developer under Advance Authorisation/DFIA, for all such supplies made prior to 01.07.2017.
4. Accordingly, for the purpose of fulfillment of export obligation, under Advance Authorizations/DFIA Schemes, in case of supplies made to SEZ unit/developer/co-developer prior to 01.07.2017, the exporter may submit the following corroborative evidence in lieu of ‘Bill of Exports’:
a. ARE-1 (showing the Advance Authorisation No./DFIA file No. and) duly attested by jurisdictional Central Excise/GST Authorities of AA holder/DFIA Exporter
b. Evidence of receipt of supplies by the recipient in SEZ
c. Evidence of payment made by the SEZ unit to the AA/DFIA exporter as per Para 4.21 of FTP.
5. This Policy Circular is issued with the approval of DGFT.
(K M Harilal)
Joint. Director General of Foreign Trade
(Issued from file no. 1/94/180/1125/AM20/PC-4)
