World Trade Organization Organisation Mondiale du Commerce Organización Mundial del Comercio

The security need not be in the form of a guarantee.

47. The report indicates that "goods exported from India may re imported within three years, provided that there has been no change in the classification of the goods." What happens in cases where changes were made to a good but still it maintains its tariff classification? Can duty free entry be allowed? (Page 41, paragraph 9)

Reply: The re import procedures are dealt with under Section 20 of the Customs Act, 1962 and the various exemption notifications. Normally, the re imported goods are liable to duty and are subject to all the conditions and restrictions, if any, to which goods of the like kind and value are liable or subject, on the importation thereof. However, there are exemption notifications relating to re import. The exemptions are conditional and also the duty free entry is not allowed in all cases.

As for instance, under notification No. 158/95 Cus., dated 14.11.1995, goods manufactured in India and re imported into India for repairs or for reconditioning are exempt from duty subject to the conditions, inter alia, that such re importation takes place within 3 years from the date of exportation and the Customs is satisfied as regards identity of the goods and that the goods after repairs or reconditioning are exported. This is a case where the duty free entry is allowed subject to the fulfillment of certain conditions. However, under notification No. 43/96 Cus., dated 23.7.1996, goods manufactured in India and exported for carrying out coating, electroplating or polishing operations, when re imported into India, after completion of the said processes are charged to duty on the value comprising the fair cost of the said processes carried out abroad and insurance and freight, both ways. One of the conditions for availing of this facility is establishment of the identity of goods. This is a case where the classification remains unchanged in most situations but changes have been made to the good by way of coating or polishing operations.

48. Paragraph 14 states that "imports are not allowed without the certificate of conformity, which is issued only for end users and not for general importers." What happens if an import is attempted for distribution at national level of a product? Does it prevent some companies from making these imports and proceed with the sale in the domestic market? (Page 43, paragraph 14)

Reply: Some of the items have multiple uses wherein use in some specific purpose is regulated by separate permission. For example, in case of Boric acid, the restriction is for regulating it when used as insecticide. Information about end use for import of product is necessary to ensure that the product imported for non insecticidal purposes does not get diverted to improper/un regulated use. There is a corresponding requirement for domestic producers of such items requiring declaration of particulars regarding quantum of the product manufactured and sold by them to ascertain/verify its end use. The requirements relating to such permit and reporting apply to all dual or multi use insecticides. Section 29 of the Insecticides Act 1968 enumerates the offences for which punishment of imprisonment (or fine or both) has been provided for. There are several government enforcement/intelligence agencies which keep a vigil on misuse whether it is imported or diverted from local market.

49. The report notes that free zone (SEZ) companies must pay (must be paid) an amount equal to the duty to be paid on imported goods. What does "imported goods" refer to: the raw material needed to produce a final good or imported machinery and other elements to establish the zone? (Page 43, paragraph 14)