Duty-free import of mandatory spares up to 10 per cent of the cost-insurance-freight (CIF) value of the licence, required to be exported/supplied with the resultant product, would be allowed under advance licence, Maran said.
As per the proposal, the Duty Exemption Entitlement Certificate (DEEC) Book scheme will be abolished and redemption will be on the basis of shipping bills and bank realisation certificates.
An advance licence is issued to allow duty-free import of inputs, which are incorporated in the export product after making normal allowance for wastage. In addition, fuel, oil, energy, catalysts, consumed to obtain the product, are allowed under the scheme.
The licence is issued for physical exports to a manufacturer-exporter, intermediate supply to a manufacturer-exporter for import of inputs and deemed export to the main contractor for import of inputs.
Such licence for deemed goods can also be issued for supplies made to the UN organisations or under the aid programmes of the UN or other multilateral agencies and paid for in foreign exchange.
In case of advance licence, the drawback is available for any of the duty paid materials, whether imported or indigenous, used in the goods exported, as per the drawback rate fixed by the ministry of finance. The drawback is, however, restricted to the duty paid materials as mentioned in the licence.
