weekly newsletter vol. 9 issue no. 36 september 3, 2007

H i g h l i g h t s

C o n t e n t s

ISSN 0971-9776

WEEKLY NEWSLETTER VOL. 9 ISSUE NO. 36 SEPTEMBER 3, 2007

For information about India Engineering Center, Chicagovisit : www.indiaengineeringchicago.com

For information about Engineering Export Promotion Councilvisit : www.eepcindia.org

For information about EEPC Exhibitionsvisit : www.eepcindee.com

P3

Shri Ajit Shah, Executive Consultant for Exports & Imports addressinga Workshop on Export Documentation and Export Promotion Schemes

in EEPC Mumbai office on 18th August, 2007. He is flanked byShri Rajat Srivastava, Regional Director, EEPC Mumbai

at his right along with other EEPC office personnel.

From Chairman’s Pen 2

OVERSEAS SECTION

• Overseas Market Information

– Council’s Activities

- INDEE - St. Petersburg, 2008, Russia 3

– Market Survey on Electricity Sector in Sudan 8

•Global Business Opportunities

– Tender Information 11

– Trade Enquiries 14

DOMESTIC SECTION

•Public Notice 16

•Export Finance 46

P16Govt. Notices/Notifications/

Circulars

Public Notice No. 38 (RE-2007)/2004-2009 dated 24th August,2007 – Documents to besubmitted along with ANF 3DFMS Applications for exportsw.e.f. 1.4.2007.Notification No. 84/2007-Cus(N.T.) dated 17th August, 2007 –Rules of Determination ofOrigin of Goods under thePreferential Trading Agreementbetween the Republic of India andthe Republic of Chile Rules, 2007.Circular No. 97/8/2007dated23rd August, 2007 – Proceduralissues in Service Tax-Circular.

INDEE - St.Petersburg,

2008, Russia

EEPC is organising an IndianEngineering Exhibition (INDEE)in St. Petersburg, Russia from11th to 14th March, 2008.Members are requested toregister their participationwithin 15th November, 2007.

MDA Grant available for your participation.Rush your entries to avoid disappointment.

2 Engineering Export Info-Bulletin, Vol. 9, Issue No. 36

My dear fellow exporters,

The Council had taken up the problem with regard to the proof of landing of the export consignmentin the specified markets under the Focus Market Scheme. This problem arose because ourmember-exporters, particularly exporting to Africa, had pointed out that it is practically not possiblefor the exporters to get bill of entry particularly in landlocked countries like BENIN, BURKINAFASO, ETHIOPIA, MALI, NIGER, SIERRA LEONE etc. because for exporting to these countries,the point of entry is Tema, Togo and Dakar; and from there the goods are transported by roadand customs clearance is being effected through unendorsed routes. In order to circumvent thisproblem, the Council had desired that instead, a certificate from their local steamer agent in caseof Export by Sea and certificate of issuing carrier agent in case of Air Shipment be deemed asproof of shipment to the specified destinations.

The DGFT has now issued Public Notice No. 38 (RE-2007)/2004-2009 dated 24th August 2007clarifying that as a proof of landing of export consignment in specified market, either of the followingwould accepted as evidence of arrival of export cargo to the destination Focus Market : (i) a selfattested copy of import bill of entry filed by importer in specified market or (ii) delivery order issuedby port authorities or (iii) arrival notice issued by goods carrier or (iv) tracking report from thegoods carrier. While this meets the requirement of our members, the above Public Notice hasbeen made effective from April 1, 2007. The Council has, therefore, requested to the DGFT tomake the above mentioned Public Notice No. 38 effective from April 1, 2006.

In the meanwhile, the Council has also intimated to the Government the sharp escalation inoverseas freight charges to the European Union countries in recent months and the urgent needto bring about a Shipping Regulator so that the freight rates reflect the actual demand-supplysituation and can discourage any form of rent-seeking activity during peak periods.

Further, the Council is in the process of forwarding its pre-budget suggestions to the Governmentfor the Union Budget for 2008-09, which we hope to submit this week. Also, the Council is in theprocess of submitting a Concept Note on a National Raw Materials policy to enable our membersassured supply of essential raw materials at competitive prices. It is critical that both Governmentand Industry work together to create competitive conditions in the country in order for us to beglobally competitive and meet the national exports target.

Yours sincerely,

(RAKESH SHAH)

Engineering Export Promotion Council

Chairman’s Pen

Engineering Export Info-Bulletin, Vol. 9, Issue No. 36 3

Overseas Information

Council’s Activities

ENGINEERING EXPORT PROMOTION COUNCIL

Invites Participation in

INDEE - St. Petersburg, 2008(Indian Engineering Exhibition)

March 11 - 14, 2008

In association withPetersburg Technical Fair

At

Lenexpo Fair Grounds in GavanSt. Petersburg

Russia

Preamble

EEPC India endeavours to foster exports of India�s state-of-the-art Engineering Industry into the global market.

Accordingly, EEPC is pleased to announce one of its major events � INDEE, St. Petersburg � to be held in Russia at

Lenexpo Fair Grounds in Gavan, St. Petersburg, Russia during 11-14 March, 2008. This is a major step forward to enter

into the Russian market.

Council is organizing this INDEE in association with Petersburg Technical Fair, organized by M/s. RESTEC Exhibition

Company, established in 1990 and is one of Russia�s top five exhibition companies. RESTEC holds over 100 events

including about 20 Russian collective expositions at the international exhibitions in Germany, France, UK, Italy, Finland,

Sweden and other countries on the annual basis. RESTEC�s exhibition activity in Russia have been awarded by Russian

Federal Ministries.

Petersburg Technical Fair is international specialised exhibitions held simultaneously under one roof � Metallurgy, Casting,

Tools, Metalworking technology, Compressors, Pumps, Valves and Bearings.

Over 300 companies from 16 worldwide countries participated in Petersburg Technical Fair during March 2007. More

than 10,500 visitors from 150 Russian Cities and 12 Countries visited this mega event.

Council has booked 2500 sq. mtrs. of space in Hall No. 8A of Lenexpo Fair Grounds at St. Petersburg.

India has been declared �Partner Country� at this Exhibition.



About Russia

Russia ended 2006 with its 8th straight year of growth averaging 6.7% annually since the financial crises of 1998. Althoughhigh oil prices and a relatively cheap Rouble initially drove this growth, since 2003-04 consumer demand and, morerecently, investment have played a significant role. A number of important reforms in the areas of tax, banking, labour

and land codes have raised investor confidence which led to surge in FDI to 14.6 billion US$ in 2005.

India and Russia :

Russia and India enjoy long standing historic relations. Immediately prior to the collapse of the Soviet Union, India wasthe largest trade partner. However, after its disintegration, total trade between India and Russia dropped drastically. Since2001-02 there has been no growth in India�s overall export to Russia. However, there has been a surge in import fromRussia to India. Since 2003-04, India�s trade balance with Russia is negative and on the rise.

In the engineering sector a growth is observed in export from India to Russia � 68% in 2005-06 over 2004-05. The majorareas of growth are :

- Manufactures of Metals; - Machinery and Instruments;

- Transport Equipments; - Machine Tools;

- Items of Iron and Steel.

In view of the present economic boom in Russia, imports to Russia are increasing significantly. In order to increase India�sshare in Russia�s global imports, it is being planned to organize an exclusive Indian Engineering Exhibition (INDEE) inSt. Petersburg.

Product Sector

INDEE - St. Petersburg will be focusing mainly on the following industry sectors :

- Electric Home Appliances & Parts

- Automobile & Components

- Primary Iron & Steel

- Bicycle & Parts

- Industrial Machinery

- Electrical Power Equipments

- Food Processing Machinery

- Textile & Jute Mill Machinery

- Pumps & Compressors

- Cranes

- Lifts & Winches

- Castings

- Forgings

- Fasteners

- Machine Tools

- Cutting Tools

- Heating & Cooling Equipments

- Utensils & Kitchen Wares

- Tractors & Agricultural Equipments

- Primary Aluminium & Aluminium Products

- Ferro Alloys

- Construction Machinery

- Commercial Vehicles

- Wires & Cables

- Knitting Machinery

- Pharmaceutical Machinery

- Transmission Line Towers & Parts

- Railway Track Materials

- Steel Pipes & Tubes

- Dry & Storage Batteries

- Hand Tools

- I.C. Engines & Parts

- Mica & Mica Products

- Scientific & Surgical Instruments

- Sewing Machines

- Defence Equipments and Supplies



Date of Exhibition

Date : March 11-14, 2008

Venue of the Exhibition

Lenexpo Fair Grounds in GavanSt. PetersburgRussia

Display Booth

Built up booth of minimum 9 sq. mtrs. are available which includes :

1 Round Table, 3 Chairs, 1 Waste Paper Basket, 3 Spot Lights, Fascia, One 10 Amp. Electrical Socket, Carpet.

Larger booth in multiple of 3 sq. mtrs. are also available.

Participation Charge

One side open booth : Rs. 19,000/- per sq. mtr.

Two side open booth : Rs. 20,900/- per sq. mtr.

Early bird discount of Rs. 10,000/- will be provided to the companies who will confirm their bookings up to 31stOctober, 2007.

Due to limited availability of 2 side open booths, allocation will be done on first-come-first-served basis subject to receivingfull payment.

Payment & Cancellation

Full payment should be made along with Application Form, duly filled in latest by 15th November, 2007. The payment shouldbe made by way of Demand Draft drawn in favour of �Engineering Export Promotion Council� payable at New Delhi.

Reservation requests will be considered only after receiving 100% payment. 50% cancellation charge applicable ifreservation is cancelled before 15th December, 2007. Any cancellation after this date would result in 100% forfeiture.Acceptance of application and allocation of space will be at the sole discretion of the Council.

Shipment of Exhibits

In order to facilitate shipment of exhibits, Council will appoint a Shipping Agent.

Selection Criteria

Final selection of the participants will be done by a Committee based on the criteria such as Accreditation to the InternationalStandards (like ISO, QS, etc.) foreign collaboration, annual export, and exports to Russia.

Travel and Hotel Accommodation

Council will assist participants in locating suitable air lines and hotels at St. Petersburg, Russia at negotiated rates throughaccredited Travel Agents. However, participants are free to stay and travel through their own agencies.

Visa

Council will issue a recommendation letter for the representatives of the company participating in INDEE for the grant of

visa to visit St. Petersburg for the show. EEPC will not give any guarantee for the grant of visa to any participant, as this

is the sole discretion of the Russian High Commission in India.


MDA Grant

All eligible participants will be entitled to MDA grant under Focus CIS Programme of the Ministry of Commerce, Governmentof India as per the MDA Guidelines effective from April 01, 2006.

Assistance would be permissible on travel expenses by Air in Economy Excursion Class fare and/or charges of built upfurnished stall subject to an upper ceiling of Rs. 1,50,000/- (Rupees One Lakh Fifty Thousand only).

Further, eligibility for MDA grant is subject to exporting companies having FOB value of exports up to Rs. 15 crores in thepreceding year, having completed 12 month membership with EEPC with regular filing of returns and fulfilling otherconditions, details of which can be obtained from respective Regional Offices of EEPC.

Submission of Application

Interested firms may please send their Application (as per enclosed format) duly filled in and signed, along with paymentlatest by 15th November, 2007 to :-


R. MaitraExecutive DirectorEngineering Export Promotion CouncilVandhna, 4th Floor11, Tolstoy MargNew Delhi � 110 001Tel. : 91-11-23711124/25Fax : 91-11-23310920E-mail : [email protected] : www.eepcindia.org

Rajat SrivastavaRegional DirectorEngineering Export Promotion CouncilCentre 1, 12th FloorWorld Trade CentreCuffe ParadeMumbai � 400 005Tel. : 91-22-22186655/56/60Fax : 91-22-22180119E-mail : [email protected], [email protected]

S. DoleRegional DirectorEngineering Export Promotion Council19, Kasturba Gandhi Marg

Surya Kiran (4th Floor)

New Delhi � 110 001

Tel. : 91-11-23314171/74

Fax : 91-11-23317795

E-mail : [email protected]

Bhaskar SarkarAddl. Executive Director & SecretaryEngineering Export Promotion CouncilVanijya Bhavan (1st Floor)International Trade Facilitation Centre1/1, Wood Street, Kolkata � 700 016Tel. : 91-33-22890651/52Fax : 91-33-22890654E-mail : [email protected] : www.eepcindia.org

Anima PandeyRegional DirectorEngineering Export Promotion CouncilVanijya Bhavan (2nd Floor)International Trade Facilitation Centre

1/1, Wood Street

Kolkata � 700 016

Tel. : 91-33-22890673/74

Fax : 91-33-22890687


M. GanesanRegional DirectorEngineering Export Promotion CouncilGreams Dugar (3rd Floor)149, Greams Road

Chennai � 600 006

Tel. : 91-44-28295501/02

Fax : 91-44-28290495




Application FormINDEE - St. Petersburg, 2008

(11 - 14 March, 2008)

Name of the Company :

Postal Address :

Phone (with area code) :

Fax (with area code) :

E-mail :

Website :

Name & Designation of the Chief Executive :

Mobile No. of the Chief Executive :

Name & Designation of the Participant :

Mobile No. :

Passport No. & Valid up to :

Status : ! Manufacturer/Exporter ! Merchant Exporter ! Export House

Booth Requirement : ! One side open ! Two side open

Area (Minimum Booth area : 9 sq. mtrs.) : Area :

Total Annual Export (in Million US$) : 2004-2005 2005-2006 2006-2007

Total Export to Russia (in Million US$) : 2004-2005 2005-2006 2006-2007

Foreign Collaboration, if any :

Products Manufactured/Exported :

Countries of Export :

Accreditation to International Standards :(like ISO, QS, etc.)

Nature of Display : Display of Samples !Display of Posters !

1. Please use separate sheet to furnish details of your company (within 80 words) for the Exhibitors� Profile.

2. Please send us this Form duly completed and signed along with your participation fees by Demand Draft and2 (two) copies of passport size colour photographs of the Participant.

Signature :

Date : Office Seal :



Overseas Market Information

Market Survey on Electricity Sector in Sudan

(Continued from previous issue)

Doing Business in Sudan

Doing business with a resurgent Sudan is difficult, exciting, frustrating, rewarding and uncertain. The bureaucracy and

the obsession with national security by a multiplicity of agencies can try one�s patience. Getting visas and residence

permits is exhausting and becoming increasingly more difficult. The fainthearted should stay away. Deals are aplenty,

especially in the South that after over two decades of civil war, needs everything. Most major projects need some kind

of financing (preferably concessional), and based on present experience, repayment seems likely if late. However, we

advise commercial prudence and Indian exporters and investors should remain in touch with the Embassy.

Transparency International lists Sudan as one of the most corrupt countries in the world (144/155), while the World Bank�s

�Doing Business in 2006� report ranks Sudan at 151/155 countries in its �Ease of Doing Business� table. According to

the Bank report, 10 procedures are needed to start a business, which takes 38 days. Exporters require 9 documents

and 35 signatures (82 days) while importers need 15 documents with 50 signatures and the process takes 111 days.

Enforcing a contract necessitates 67 procedures averaging almost 3 years!

Notwithstanding the Bank�s view, we encourage Indian companies to explore commercial possibilities in Sudan, especially

in the automotive components sector. United States economic sanctions against Sudan since 1997 prohibit trade and

investment by US businesses except in food and medicines (so Coca Cola and Pepsi are available!).

As this country develops, there will be growing potential for Indian companies in infrastructure, railways, roads, automobiles,

power generation, telecommunications, water treatment, human resource development, agriculture, pharmaceuticals and IT.

Import demand is surging as reconstruction begins. With the focus on developing southern Sudan after the January 2005

Comprehensive Peace Agreement, that region needs everything from infrastructure to consumer durables.

Electricity Sector in Sudan

Sudan�s inadequate power sector has long been a major impediment to economic growth. The country is heavily dependent

on hydroelectricity to meet its needs. Of the total installed capacity of about 1,200 MW in 2006 (plus about 200 MW

through non-grid generators), almost two-thirds is through hydroelectric generation, which means insecure reliance on the

volume of water flowing through the Nile and the challenge of heavy silting during the rainy season. At present, only

30% of Sudan�s 40 million people have assured access to electricity (the south has none) but the Government hopes

to increase that figure to 90% in coming years.

The electricity sector suffers from poor infrastructure and frequent outages. The country's total electricity generation was

2.4 billion kilowatt hours in 2005. As of end-2006, almost three-quarters of state-owned electricity generation comes through

the Blue Nile grid centred on the 280-MW Roseires dam (approximately 500 km southeast of Khartoum) and the older

Sennar hydroelectric scheme. There is also a western grid.



In the past, the Roseires facility came under frequent attack by rebel groups, and low water levels often caused its output

to fall to 100 MW. There are other smaller dams at Khashm al Girba and Jebel Aulia. Sudan is an active member of

the Joint Electricity Supply Project linking the Euga Dam in Congo (Zaire) with the Ethiopian plateau.

The National Electricity Corporation of Sudan supplies its 1,200 MW of electricity through the 220 kV national grid that

stretches from Roseires to Atbara, and from Kosti to Kasala. In 2007, the grid will be extended to Merowe and then

on to Dongola in the North, to Port Sudan in the east, and to El Obeid and Renk in the south.

The remaining areas depend on small diesel-fired power units producing about 125 MW, expensive and unreliable with

frequent blackouts/brownouts. Although more power is being brought to Khartoum through the Chinese-built transmission

line from Roseires to Khartoum, the citywide distribution system is decrepit.

Khartoum and the Central region account for over 80% of total electricity consumption, the south and west less than 2% each.

Industry and residential customers consume 40% each of the total generation.

Several projects are planned to increase Sudanese generating capacity. The largest include the 1,250-MW Merowe and

300-MW Kajbar hydroelectric facilities in northern Sudan. France's Alstom and several Arab investors have contributed

funds to Merowe, with all ten turbines scheduled to be completed by July 2008, doubling present output. The main contractor

for the US$1 bn dam is the China International Water & Electric Corporation. The Merowe project includes a 1,774 km

transmission network (covering almost half the country) and 7 sub-stations in Markyat, Kabashia, Atbara, Merowe, Dabba,

Dongola and Port Sudan.

China is financing 75% of the $200 million Kajbar dam construction, with Sudan providing the balance. Environmental

groups have expressed concern about the Kajbar project, citing potential damage to the Nile ecosystem and the culture

of displaced Nubian residents of the area. Security forces shot four protestors in June 2007 and arrested several others

(including journalists).

In late 2004, Sudan officially inaugurated a new 275-MW diesel power plant just outside Khartoum (the first new power

plant in a generation). Significantly, the plant was built by a private Malaysian-led IPP consortium. Several additional

power stations with a total capacity of 700 MW are scheduled for completion before 2010.

Indian companies (and Chinese) are participating in upgrading Sudan�s power generation capacity. In December 2005,

India approved a US$41.9 mn Line of Credit for the Singa-Gedaref Transmission Line to be done by Angelique International

of New Delhi.

In October 2006, Sudan and Ethiopia agreed on financing arrangements for the 320 km 230-kilovolt power grid connection

between Gondar (Ethiopia) and Gedaref (Sudan). Angelique International of New Delhi will link Gedaref with Gallabat on

the border with a US$25 mn Exim loan. The interlinking of the grids will enable Ethiopia to sell its surplus power generated

from a number of new hydroelectric projects.

In February 2006, BHEL signed a contract with the National Electricity Corporation for the US$457 mn 4 x 125 MW Kosti

multicycle power plant (the largest single project in the power sector in Sudan) with part funding through a US$350 mn

Line of Credit from Exim Bank. Both projects are crucial for Sudan�s efforts to improve its electricity sector.

Following an announcement during Rashtrapatiji�s visit to Sudan in October 2003, Central Electronics Limited of India

electrified Khadarab village near Khartoum using solar photovoltaic cells with financial support (US$50,000) from our

Ministry of Nonconventional Energy Sources. The project was inaugurated in April 2006.



As the demand for electric power grows, the NEC is concentrating on increasing generation capacity, building new power

transmission and distribution lines through a perspective plan to increase on-grid power generation by about 3,500 MW by

2010. The national grid will increase and extend northwards to Atbara city to connect the northern areas in the grid, southwards

to include southern areas up to Malakal, and westwards to El Obeid to link western Sudan with the national grid.

Surprisingly, the distribution system through the grid is efficient. This is explained by a scheme in which the consumer

purchases the units before using them, thus heavily reducing power theft.

The National Electricity Corporation of Sudan has several projects available for foreign investors. Financing is essential,

with a minimum grace period of three years and repayments in 10-15 years. Most of these projects are in northern and

western Sudan (Darfur region).

Established because of the January 2005 North-South Comprehensive Peace Agreement, the autonomous Government

of Southern Sudan (GoSS) has its own projects to build a grid and remedy the miserable power situation in the south.

Most of these projects will be financed by donors through the World Bank administered Multi Donor Trust Fund (South),

established along with the MDTF (North) following the April 2005 Oslo Donors Conference. However, the administrative

system in southern Sudan is still evolving.

More information can be sought from Engr. Makkawi Mohamed Awad, Managing Director of the National Electricity

Corporation, Khartoum at +249 1 83770686 (Phone), +249 1 83773714 (Fax) and [email protected] (E-mail).

(Source : Embassy of India, Khartoum)


Tender Information


Brazil(EEPC Ref. No. DB-1686)

Project : Sao Paulo Trains and Signaling Project

Project ID No. P106038

Loan from IBRD

Notice No. : WB4358-710/07

Issued by : Companhia Do Metropolitano De São Paulo

Gerência De Contratações E Compras

(Purchasing and Procurement Management)

Engº. Sérgio Corrêa Brasil

Rua Boa Vista, 175 2nd Floor

01410-001 São Paulo - Sp - Brazil

Tel. : +55-11-3291-5375

Fax : +55-11-3291-5351


For : Supply and installation for modernization of the systems of signaling and telecommunications of the

Companhia Do Metropolitano De São Paulo :

- Signaling system for Lines 1 - Blue, 2 - Green and 3 - Red and Train�s onboard controlling equipment

for all train fleets of these lines and adjustment of centralized train control system;

- Telecommunications systems for Lines 1 - Blue, 2 - Green and 3 - Red, embracing audio, voice, video,

radio and optical data transmission and wireless network for stations tunnels and trains and completely

disassembling of old equipment and cables;

- Auxiliary systems for stations access controlling, support to maintenance and platform screen doors for

terminal stations.

Tender cost : Non-refundable fee of R$ 1,000.00

Bid security : R$ 4,000,000.00 or an equivalent amount in a freely convertible currency.

Bid deadline : 18.10.2007

Nigeria(EEPC Ref. No. DB-1687)

Project : Second National Urban Water Sector Reform Project

Credit No. 4086-UNI; Project ID No. P071391

Credit from IDA

Notice No. : WB4352-710/07



Issued by : Engr. Shayo HollowayGroup Managing DirectorWater HouseIjora, Lagos, NigeriaAttn. : Dr. Yemi Suleiman Project CoordinatorTel. : 234-1-774 1973/9034E-mail : [email protected]

[email protected]

For : Procurement of (3) Heavy-duty Utility Vehicles and (3) Staff Buses

- Lot No. 1

- Identification No. LSWC/2NUWRP/ICB/GS.036

- Description : 2 No. 17 Tons Truck with flat bed carrier complete with accessories, and 1 No. 17 TonsTruck mounted with standard flat bed carrier and installed with 5 Tons Crane complete with accessories.

- Lot No. 2

- Identification No. LSWC/2NUWRP/ICB/GS.036

- Description : 3 Nos. 52-seater fully air-conditioned Bus with accessories and options.

Tender cost : Non-refundable fee of N50,000 or US$400.00

Bid security : NG N1,500,000.00 or an equivalent amount in a freely convertible currency.


Pakistan(EEPC Ref. No. DB-1688)

Project : Proposed Electricity Distribution & Transmission Improvement ProjectProject ID No. P095982Loan from IBRD

Notice No. : WB4353-710/07

Issued by : The Lahore Electric Supply Company (LESCO)22-A, Queens RoadLahore, PakistanAttn. : Mr. Chaudhry Abdul Ghafoor Operation DirectorTel. : (92-42) 6308401/2493Fax : (92-42) 6308723/9507E-mail : [email protected] : www.lesco.gov.pk

For : Procurement of 132 kV Transmission Line Conductor and Earth Wire :

- Lot I : ACSR Rail Conductor - 165 Km.

- Lot II : Galvanized Steel Earth Wire - 30 Km.

Tender cost : Non-refundable fee of Pak Rs3000 or US$50 + Pak Rs4000 or US$65 (courier charge)

Bid security : Pak Rs600,000 for Lot-I and Pak Rs100,000 for Lot-II or equivalent in a freely convertible currency.




Uganda(EEPC Ref. No. DB-1689)

Project : Energy for Rural Transformation Programme

Credit No. 3588-UG; Project ID No. P069996

Credit from IDA

Notice No. : WB4374-710/07

Issued by : The Permanent Secretary

Ministry of Energy and Mineral Development

Amber House

29-33, Kampala Road

1st Floor, Room B102

Kampala, Uganda

Attn. : Mr. Isaac Kyaligonza


For : Supply of the Compact Fluorescent Lamp (CFL), Test Bench Equipment.

Tender cost : Non-refundable fee of 50,000 or US$30

Bid security : US$4000


(Source : UN Development Business Website)


Trade Enquiries


Trade enquiries generated at EMAQH 2007, Buenos Aires, Argentina

Argentina

Name of the Company Addresses Contact Person/Tel./Fax/E-mail Items interested

Industria Skotnica S.A. Paso De Burgos 1825 Attn. : Mr. Jorge C. Skotnica Spring washes, circlips, bowleB1868CFC-Avellaneda Presidente pins.Provincia DE BS, AS Tel. : 54-11-4209-1440Argentina Fax : 54-11-4209-8967

E-mail : [email protected] : www.skotnica.com.ar

Venanfor S. A. Ruta 8 Km. 365 (2600) Attn. : Mr. Maximiliano Spiral making machineVenado Tuerto Landaburu (dia 60 mm to 300 mm � spiral).C.C. 584 - Santa Fe Contador Publico NacionalArgentina Tel/Fax : (54) 03462-421069/436520

E-mail : [email protected] [email protected]

Website : www.venanfor.com.ar

Sudametal S.A. Av. Leandro N. Alem 690 Attn. : Mr. Alan Goodridge Stainless steel wires/bars.Piso 18 Tel. : 54-11-4312-3071Buenos Aires Fax : 54-11-4313-2536Argentina E-mail : [email protected]

[email protected] : www.sudametal.com

Jose Faccioli, Divison Av.Galicia 2260 Attn. : Mr. Marcelo Faccioli Special welding purposePetroleo Rep. de Síria 6947 Tel/Fax : 54-342-4697377/ machines.

3000 - Santa Fe 4609683Provincia de Santa Fe E-mail : [email protected] [email protected]

Website : www.josefaccioli.com.ar

Tecnodil S.R.L. Republica del Líbano 1750 Attn. : Mr. Matias Di Lorenzo Measuring devices.Código Portal B1878CSJ Gerente de VentasCiudad de Quilmes Telefax : 54-011-4253-4548/Prov. De Buenos Aires 4224-5852Argentina E-mail : [email protected]

[email protected] : www.tecnodil.com

Liliana S.R.L. 1155, Warnes Street Attn. : Mr. Jose Carlos Motor for fans, ceiling fans, standPostcode S2005PDG Bobrovsky fans, wall fans - electrical homeRosario City Product Manager � appliances.Argentina Engineer

Tel. : 54-341-454-1300Fax : 54-341-454-1200E-mail : [email protected]

[email protected] : www.liliana.com.ar



Name of the Company Addresses Contact Person/Tel./Fax/E-mail Items interested

Aftermarket Consultores Miguel de Attn. : Mr. Pablo Rubietti Automobile components, brakes,

Lationamericia S.R.L. Azquénaga 1128, 1° E Consultor Ejecutivo clutches, bearings, tensioners.B1638BVVV Vicente Lopez Tel. : 54-11-4795-6910Buenos Aires E-mail : [email protected]

Argentina Website : www.aftermarketweb.com.ar

Far East Shipping Freight Saladillo 1453 (CP 1440) Attn. : Lic.Sergio Rana CNC machining centre, rectifier.Forwarder & Custom Capital Federal (C & F Agent)

Broker Buenos Aires Tel. : 54-11-156-308-5872/Argentina 4686-4893


[email protected] : www.far-eastshipping.com.ar

Oxygear S.A. Av Rolon 1263 Attn. : Mr. Ricardo Donegana Flow meters for oxygen cylinder

Boulogne - San Isidro Tel. : 54-11-4758-8994 for hospital use, air compressorBuenos Aires Fax : 54-11-4766-5996 for oxygen therapy in general,Argentina E-mail : [email protected] pressure regulator for oxygen,

[email protected] oxygen therapy in generalWebsite : www.oxygear.com.ar medical compressor (all medical

equipments).

Victoria SRL Teodoro Plaza 3951 - (1702) Attn. : Mr. Richard Menon Steel wire rope and fittings,Ciudadela Tel. : (011) 4657-4443 chains, fittings grade 4 to 8,

Buenos Aires E-mail : clamps.Argentina [email protected]

Website : www.victoriasrl.com.ar

Brazil

Suprasonic Electronica Rodovia SP 332 Attn. : Mr. Nelson Silva H. Spark erosion machine.Ltda. 1.300 - Bairro Mursa Representante

CEP 13226-400 � Cx Tel. : 55-11-4606-8300

Postal 76 - Varzea Paulista Fax : 55-11-4606-8308Sao Paulo E-mail : [email protected] [email protected]

Website : www.suprasonic.com.br

Uruguay

Mylsa, Materiales Electricos Emilio Garcia With 4254 Attn. : Mr. Antonio Martinez Varela Electrical items, switches.Montevideo Director

Uruguay Tel. : (598-2) 215-4713, 216-2863Fax : (598-2) 215-4716E-mail : [email protected]

[email protected] : www.mylsa.com.uy


Public Notice

Domestic Information

Government of IndiaMinistry of Commerce & Industry

Department of CommerceDirectorate General of Foreign Trade

New Delhi

Public Notice No. 38 (RE-2007)/2004-2009Dated 24th August, 2007

In exercise of powers conferred under Paragraph 2.4 of the Foreign Trade Policy 2004-2009, the Director General of Foreign

Trade hereby makes the following amendments in Handbook of Procedures, Vol. I :

Serial No. 3 of Documents to be submitted along with ANF 3D Focus Market Scheme (FMS) Applications (for exports

w.e.f. 1.4.2007 shall be amended to read as under :-

�As a proof of landing of export consignment in specified market, (i) a self attested copy of import bill of entry

filed by importer in specified market or (ii) delivery order issued by port authorities or (iii) arrival notice issued

by goods carrier or (iv) tracking report from the goods carrier, evidencing arrival of export cargo to destination

Focus Market.�

Sd/-

(R. S. GUJRAL)

Director General of Foreign Trade

(File No. 01/94/180/383/AM08/PC-1)



Government of IndiaMinistry of Commerce & Industry

Department of CommerceDirectorate General of Foreign Trade

New Delhi

Public Notice No. 39 (RE-2007)/2004-2009Dated 24th August, 2007

In exercise of powers conferred under Paragraph 2.4 of the Foreign Trade Policy 2004-2009, the Director General of Foreign

Trade hereby makes the following amendments in Handbook of Procedures, Vol. I :

1. Paragraph 3 (viii) and (ix) of Appendix 14-I-I shall be amended to read as under :-

�(viii) Reimbursement of CST will be made on quarterly basis. The application for claiming reimbursement should be

filed within a period 6 months from the completion of the quarter in which the claim has arisen. In case of

procurement of goods against payment in installments, the CST reimbursement claim may be made in the

quarter in which the full payment has been effected against the invoice/bill. Whenever application is received

after expiry of last date of submission of such application, provisions of para 9.3 of the HBP Vol. 1, would apply.

(ix) Application for supplementary claim will be considered as per provisions of para 9.4 of HBP Vol I�.

Sd/-

(R. S. GUJRAL)

Director General of Foreign Trade

(File No. 01/92/180/115/AM08/PC-II)


F. No. 605/66/2006-DBKGovernment of IndiaMinistry of Finance

Department of RevenueCentral Board of Excise & Customs

New Delhi

Circular No. 27/2007-Cus.Dated 26th July, 2007

Applicable date for calculating the interest on excess importsunder Para 4.28 of the Handbook of Procedures, Vol. I - reg.

I am directed to invite your attention to Para 4.28 of the Handbook of Procedures, Vol. 1 and Notification No. 93/2004-Cus.

dated 10.9.2004 according to which the authorisation holder is required to pay Customs Duty along with interest on the

unutilized portion of the imported material in case he is unable to discharge the full export obligation.

2. A reference has been received by the Board seeking clarification regarding the manner in which the interest is to be

calculated, especially in cases where the imports have taken place at two or more different dates and there is a partial failure

in fulfillment of the export obligation. A doubt has been raised whether the applicable date for calculating interest in such

cases would be the date of first imports or the date of last imports.

3. The matter has been examined by the Board. Prima facie, no interest becomes due till the taxable event i.e. excess

import has occurred. As the goods imported first are normally used first in the manufacturing process, it would be logical to

treat the last imports, which could not be utilised in the manufacture of export goods, as excess imports unless specific

correlation between imports and exports is available.

4. It is, therefore, clarified that the applicable date for calculation of interest in terms of Para 4.28 of the Handbook of

Procedures Vol. I and Notification No. 93/2004-Cus. dated 10.9.2004 would be the date of clearance of last imports, which

would not be utilised in the manufacture of export goods, unless specific correlation between imports and exports is available.

5. These instructions may be brought to the notice of the trade and the staff by issuing suitable Trade Notice/Standing

Order. Difficulties faced, if any in implementation of this Circular may please be brought to the notice of the Board at an early

date.

Sd/-

(NAVNEET GOEL)

Director (DBK)




F. No. 450/97/2005-Cus. IVGovernment of IndiaMinistry of Finance


New Delhi

Circular No. 31/2007 (Customs)Dated 29th August, 2007

Issues concerning import & export through courier mode-regarding

The undersigned is directed to invite your kind attention towards the issues raised by Express Industry Council of India

(EICI) on the difficulties being faced by them in clearances of export & import of courier consignments through courier mode.

EICI has informed that they face difficulties in following areas,-

(i) Availment of CENVAT Credit on Courier Bill of Entry;

(ii) Filing of regular Bill of Entry by Express Companies; and

(iii) Single registration with Customs so as to enable Authorised Courier to operate at all Customs locations.

2. Board has examined the issues. Circular No. 56/95-Cus. dated 30/5/95 prescribes for assessment and clearance of

goods imported by Courier Mode. These general instructions are followed for clearance of courier consignments. Additional

guidelines have been prescribed vide Circular No.85/1998-Customs dated 13/11/1998. Para 6 of the Circular No. 56/95-

Cus suggest that when any consignee wishes to claim MODVAT (now CENVAT) credit, he should be advised to file the

normal Bill of Entry, as per the Bill of Entry (Forms) Regulations, 1976. This will serve as the document for claim of

MODVAT. In no case is the customs to issue separate certificates for this purpose. Accordingly, it is clarified that

whenever consignee intends to take CENVAT credit on imported goods, normal Bill of Entry may be filed. This Bill of

Entry may be used by the importer for taking CENVAT credit on any imported goods, as per clause (c) of rule (9) of

CENVAT Credit Rules, 2004.

3. EICI has informed that some field formations like Delhi allow �authorized courier� to file Bill of Entry while some other field

formations are insisting that the Bill of Entry be filed by Customs House Agents. As per proviso to regulation 5(3), the Bill

of Entry can be filed by authorised Courier, or with the concurrence of the Authorised Courier, the consignee or a

Customs House Agent on behalf of the consignee. Further, as per definition in section 2(26) of the Customs Act, 1962,

�importer�, in relation to any goods at any time between their importation and the time when they are cleared for home

consumption, includes any owner or any person holding himself out to be the importer. Similarly, section 2(20) of the

Customs Act, 1962 defines �exporter�, in relation to any goods at any time between their entry for export and the time

when they are exported, includes any owner or any person holding himself out to be the exporter.

Regulation 13(a) of the Courier Imports and Exports (Clearance) Regulations, 1998 provides that an Authorised Courier

shall obtain an authorisation, from each of the consignees of the import goods for whom such courier has imported such

goods or consigners of such export goods, which such courier proposes to export, to the effect that the Authorised

Courier may act as agent of such consignee or consigner, as the case may be for clearance of such import or export

goods by the proper officer.

In view of above, it is clarified that Authorised Courier may be permitted to file regular Bill of Entry or Shipping Bill.

4. Board had also amended Courier Imports and Exports (Clearance) Regulations, 1998 vide Notification No. 09 /2007-

Customs (N.T.) dated 07th February, 2007 which, interalia, provided single registration to Couriers so as to enable them



to operate at all Customs locations. As per regulation 7(2) of the Courier Imports and Exports (Clearance) Regulations,

1998, the authorised courier who is registered as per Regulations, shall transact the business in all Customs Stations

within the country subject to an intimation in prescribed Form A to the Commissioner of Customs having jurisdiction over

the Customs Station where he has to transact the business. Further, Regulation 12 provides that the registered authorised

courier shall furnish the bond and security for each Customs station from where he has to transact the business.

Accordingly, field formations may permit the operation of Authorised Courier based on the intimation as per Regulation 12

of the Courier Imports and Exports (Clearance) Regulations, 1998 and subject to execution of specified Bond and

Security. No separate registration is required.

4. The above instructions may be brought into effect immediately through appropriate Public Notice.

Sd/-

(ASEEM KUMAR)

Under Secretary to the Government of India



Government of IndiaMinistry of Finance


New Delhi

Customs NotificationDated 11th June, 2007

Corrigendum

In the Notification of the Government of India in the Ministry of Finance (Department of Revenue), No. 73-Customs, dated the

21st May, 2007, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-Section (i) vide number G. S. R. 365 (E),

dated the 21st May, 2007 at page 12,-

(i) In line 2, for �Sr. No. 565�, read �Sr. No. 568�;

(ii) In line 8, for �566�, read �569�;

(iii) In line 11, for �567�, read �570�.

Sd/-

(JAGMOHAN SINGH)

Under Secretary

(F. No. 605/16/2007-DBK)



Government of IndiaMinistry of Finance


New Delhi

Notification No. 84/2007-Customs (N. T.)Dated 17th August, 2007

In exercise of the powers conferred by sub-section (1) of section 5 of the Customs Tariff Act, 1975 (51 of 1975), the CentralGovernment hereby makes the following rules, namely :-

Rule 1 : Short title and commencement

(i) These rules may be called the Rules of Determination of Origin of Goods under the Preferential Trading Agreement

between the Republic of India and the Republic of Chile Rules, 2007(hereinafter referred as the �Agreement�).

General Provisions

Rule 2 : Definitions

For the purpose of these Rules

chapters, headings and subheadings mean the chapters, the headings and the subheadings (two, four and six digit codesrespectively) used in the nomenclature which makes up the Harmonized System or HS;

CIF means the value of the good imported that includes the cost of freight and insurance up to the port or place of entry inthe country of importation;

classification refers to the classification of a product or material under a particular heading of the HS;

customs value means the value as determined in accordance with the Article VII and the Agreement on Implementation ofArticle VII of GATT 1994 (WTO Agreement on Customs Valuation);

factory ship means any vessels, as defined, used for processing and/or making on board products exclusively from thoseproducts referred to in Clause (f) and (g) of Article 5;

FOB means the value of the good free on board, independent of the means of transportation, at the port or site of finalshipment abroad;

goods means both materials and products;

Harmonized System means the nomenclature which makes up the Harmonized Commodity Description and Coding Systemincluding the chapters and the corresponding number codes, section notes and chapter notes, as well as the General Rulesfor their interpretation;

manufacture means any kind of working or processing including assembly or specific operations;

material means raw materials, ingredients, parts, components, subassembly and/or goods that are physically incorporatedinto another good or are subject to a process in the production of another good;

product means the product being manufactured, even if it is intended for later use in another manufacturing operation;

territory means :

(a) in the case of India including its territorial waters and the air space above its territorial waters and the other maritimezones including the Exclusive Economic Zone and Continental Shelf over which Republic of India has sovereignty,sovereign rights or exclusive jurisdiction in accordance with its laws in force, the 1982 United Nations Conventionon the Law of the Sea and international law; and



(b) In case of Chile, the land, maritime, and air space under its sovereignty, and the Exclusive Economic Zone and theContinental Shelf within which it exercises sovereign rights and jurisdiction in accordance with international law andits domestic law; and

vessel means any ship engaged in commercial fishing or commercial exploitation of marine products (on HighSeas) registered with a Party and flying its flag and at least 50% of equity is owned by citizen/s, corporation orgovernment of the Party.

Section II

Criteria for Originating Goods

Rule 3 : General requirements

1. For the purpose of implementing this Agreement, the following goods shall be considered as originating from aParty :

(a) the goods wholly produced or obtained in the territory of the Party as defined in Article 5 of these Rules;

(b) the goods not wholly produced in the territory of the Party, provided that the said products are eligible underArticle 6 read with Article 7, and/or Article 4 of these Rules.

Rule 4 : Cumulation of origin

Goods originating in any of the Party when used as an input for a finished product in another Party shall beconsidered originating in the latter.

Rule 5 : Wholly produced or obtained products

The following shall be considered as wholly produced or obtained in the territory of a Party:

(a) mineral products extracted from the soil or subsoil of any of the Parties, including its territorial seas, continentalshelf or exclusive economic zone;

(b) Plants2 and plant products grown, harvested, picked or gathered there including in its territorial seas, continentalshelf or exclusive economic zone;

(c) live animals born, and raised there, including by aquaculture;

(d) products from animals as in (c) above 3.

(e) Animals and products thereof obtained by hunting, trapping, collecting, fishing or and capturing there; includingits inland waters, territorial seas, continental shelf or in the exclusive economic zone;

(f) Products of seafishing and other marine products taken from the high seas by its vessels as defined in Article 2;

(g) goods processed and/or made on board its factory ships as defined in Article 2 exclusively from the productsmentioned in subparagraphs (e) and (f);

(h) waste and scrap resulting from utilisation, consuming or manufacturing operations conducted in the territory ofany of the Parties, provided they are fit only for the recovery of raw materials; and

(i) goods produced in any of the Parties exclusively from the products specified in subparagraphs (a) to (h) above.

Rule 6 : Not wholly produced or obtained products

(1) For the purpose of Article 3(b), products worked on or processed as a result of which the total value of nonoriginating materials, or of undetermined origin used does not exceed 60% of the FOB value of the products

2 Plants, refers to all plant life, including forestry products, fruits, flowers, vegetables, trees, sea weeds and fungi.

3 animals referred to in paragraph (c), (d) and (e) covers all animal life, including mammals, birds, fish, crustaceans, molluscs and

reptiles.



produced or obtained and the final process of manufacture is performed within the territory of exporting Partyshall be eligible for preferential treatment subject to the provisions of Article 7.

(2) To qualify for preferences the non�originating materials shall be considered to be sufficiently worked or processedif the product obtained is classified in a heading, at the four digit level, of the Harmonized System different fromthose in which all the non�originating materials used in its manufacture are classified.

(3) The customs value of the non�originating materials, parts or produce shall be :

(a) the CIF value at the time of importation of the materials, parts or produce where this can be proven; or

(b) the earliest ascertained price paid for the materials, parts or produce in the territory of the Party where theworking or processing of the final goods takes place.

(4) The value of the materials, parts or produce of undetermined origin shall be the earliest ascertained price paidfor them in the territory of the Party where the working or processing of the final goods takes place.

(5) The formula for 40% value added is as follows :

Customs value of Value ofNon-originating materials, + Undetermined OriginParts or Produce Materials, Parts or Produce 100% < 60%

Rule 7 : Processes or operations considered as insufficient to confer originating status

In the case of the products which have non�originating materials, the following operations, inter alia, shall beconsidered as insufficient working or processing to confer the status of originating products, whether or not therequirements of Art. 6 are satisfied :

(a) preserving operations to ensure that the products remain in good condition during transport and storage suchas aeration, drying, refrigeration, immersion in salty or sulphured water or in water added with other substances,extraction of damaged parts and similar operations;

(b) dilution in water or in any other substance which does not substantially alter the product characteristics;

(c) simple operations such as removal of dust, sifting, screening, sorting, classifying, grading, matching, washing,painting, husking, stoning of seeds, slicing and cutting;

(d) simple change of package and breaking�up and assembly of packages;

(e) simple packing in bottles, cans, flasks, bags, cases, boxes, fixing on cards or boards and all other simplepackaging operations;

(f) affixing or printing marks, labels, logos and other like distinguishing signs on products or their packaging;

(g) simple cleaning, including removal of oxide, oil, paint or other coverings;

(h) simple assembly of parts to constitute a complete article or, disassembly of products into parts, in accordancewith General Rule 2(a) of the Harmonised System;

(i) slaughter of animals;

(j) simple mixing of products, provided the characteristics of the obtained product are not essentially differentfrom those of the mixed products;

(k) oil application; and

(l) a combination of two or more of the above operations.

xFOB value of the final product



Rule 8 : Accessories, spare parts and tools

1. Accessories, spare parts and tools despatched with a piece of equipment, machine, apparatus or vehicle, whichare part of the normal equipment and included in the price thereof or which are not separately invoiced, shall beconsidered as originating

if the good is originating and shall be disregarded in determining whether all the non�originating materials used inthe production of the good undergo the applicable change in tariff classification, provided that :

(a) the accessories, spare parts or tools are not invoiced separately from the good, notwithstanding they aredetailed separately in the invoice;

(b) the quantities and value of the accessories, spare parts or tools are customary for the goods.

2. Each Party shall provide that if a good is subject to a regional value content requirement, the value of accessories,spare parts, or tools shall be taken into account as originating or non-originating materials, as the case may be,in calculating the regional value content of the good.

Rule 9 : Fungible Materials

1. Where identical and interchangeable originating and non-originating materials including materials of undeterminedorigin are used in the manufacture of a product, those materials shall be physically segregated, according totheir origin, during storage.

2. A producer facing considerable costs or material difficulties in keeping separate stocks of identical andinterchangeable originating and non-originating materials including materials of undetermined origin used in themanufacture of a product, may use the so-called �accounting segregation� method for managing stocks.

3. The accounting method shall be recorded, applied and maintained in accordance with generally acceptedaccounting principles applicable in the Party in which the product is manufactured. The method chosen must:

(a) permit a clear distinction to be made between originating and non originating materials including materials ofundetermined origin acquired and/or kept in stock; and

(b) guarantee that no more products receive originating status than would be the case if the materials had beenphysically segregated.

4. The producer using this facilitation shall furnish a sworn declaration for the quantity of products considered asoriginating and keep all documentary evidence of origin of the materials. At the request of the competentauthorities of the exporting Party, the producer shall provide satisfactory information on how the stocks havebeen managed.

5. The competent authority may require from its exporters that the application of the method for managing stocksas provided for in this Article will be subject to prior authorisation.

Rule 10 : Sets

Sets, as defined in General Rule 3 of the Harmonised System, shall be regarded as originating when all componentproducts are originating. Nevertheless, when a set is composed of originating and non originating goods, the setas a whole shall be regarded as originating, provided that the CIF value of the non originating goods utilized inthe composition of the set does not exceed 15% per cent of the FOB price of the set.

Rule 11 : Packages and packing materials for retail sale

1. The packages and packing materials for retail sale, when classified together with the packaged product,according to General Rule 5 (b) of the Harmonised System, shall not be taken into account for consideringwhether all non�originating materials used in the manufacture of a product fulfil the criterion corresponding to achange of tariff classification of the said product.



2. If the product is subject to an ad valorem percentage criterion, the value of the packages and packing materials

for retail sale shall be taken into account in its origin assessment, in case they are treated as being one for

customs purposes with the goods in question.

Rule 12 : Containers and packing materials for transport

The containers and packing materials exclusively used for the transport of a product shall not be taken into

account for determining the origin of any good, in accordance with General Rule 5 (b) of the Harmonized System.

Rule 13 : Neutral elements or indirect materials

1. "Neutral elements� or "Indirect materials� means goods used in the production, testing or inspection of goods

but not physically incorporated into the goods, or goods used in the maintenance of buildings or the operation

of equipment associated with the production of goods, including:

(a) energy and fuel;

(b) plant and equipment;

(c) tools, dies, machines and moulds;

(d) parts and materials used in the maintenance of plant, equipment and buildings;

(e) goods which do not enter into the final composition of the product;

(f) gloves, glasses, footwear, clothing, safety equipment, and supplies; and

(g) equipment, devices, and supplies used for testing or inspecting the goods.

2. Each Party shall provide that an indirect material shall be considered to be an originating material without

regard to where it is produced and its value shall be the cost registered in. the accounting records of the

producer of the export product.

Rule 14 : Direct transport, Transit and Transshipment

In order for the originating goods or products to benefit from the preferential treatment provided for under the

Agreement, they shall be transported directly between the Parties. The goods or products are transported directly

provided :

(a) they are transported through the territory of one or both Parties;

(b) they are in transit through one or more territories of non-Parties, with or without transshipment or temporary

warehousing in such territories, under the surveillance of the customs authorities therein, provided that :

(i) the transit entry is justified for geographical reasons or by consideration related exclusively to transport

requirements;

(ii) they are not intended for trade, consumption, use or employment in the country of transit; or

(iii) they do not undergo operations other than unloading, reloading or any operation designed to preserve them in

good condition; and

(c) the period of such transit shall not exceed six months and goods under such transit shall bear the proof of

having been under customs surveillance through necessary endorsements in the relevant customs document(s).



SECTION III

Proof of Origin

Rule 15 : Certification of Origin

1. The Certificate of Origin is the document that certifies that goods fulfil the origin requirements as set out inthese Rules so that they can benefit from the preferential tariff treatment as foreseen in this Agreement. Thesaid Certificate is valid for only one importing operation concerning one or more goods and its original or inexceptional cases a copy of the original of which has to be submitted within 30 days from the date of clearanceof goods in the importing Party and shall be included in the documentation to be presented at the customsauthorities of the importing Party.

2. The issue of Origin Certificates and its control, shall be under the responsibility of a Government office in eachParty. The Certificates of Origin shall be directly issued by those authorities or through delegation as referredto in paragraph 3 and shall be in English.

3. The Certificate of Origin shall be signed and issued by Government offices to be indicated by the Parties whomay delegate the signing and issuing of origin certificates to other Government offices or representativecorporate body.

4. The Certificate mentioned in the preceding paragraph shall be issued in the form agreed upon by the Partiesand upon a sworn declaration by the final producer of the goods and the respective commercial invoice.

5. In all cases, the number and date of the commercial invoice shall be indicated in the box reserved for thispurpose in the Certificate of Origin.

6. When a good to be traded is invoiced by a non-Party operator, the producer or exporter of the originating Partyshall inform, in the field titled "observations" of the respective Certificate of Origin, that the goods subject todeclaration shall be invoiced from that non-Party operator, reproducing the following data from the commercialinvoice issued by this operator: name, address, country, number and date. Value addition carried out only inthe territory of a Party shall be taken into account for calculation of local value addition.

Rule 16 : Issue of Certificates of Origin

1. For the issue of an Origin Certificate, the final producer or exporter of the good shall present the correspondingcommercial invoice and a request containing a sworn declaration by the final producer certifying that the goodsfulfil the origin criteria of these Rules, as well as the necessary documents supporting such a declaration.

The said sworn declaration shall contain at least the following data :

(a) individual's name or company name;

(b) address;

(c) description of the good to be exported and its tariff classification;

(d) FOB value of the goods to be exported; and

(e) information relating to the good to be exported, which must indicate :

(i) materials, components and/or parts originating from the exporting Party and the Customs tariff heading,wherever possible,

(ii) materials, components and/or parts originating from the other Party indicating :

- origin;

- tariff classification (at least 6 level digit);

- CIF value, in United States of America dollars;

- percentage on the total value of the final product.



(iii) non-originating materials, components and/or parts indicating :

- exporting Country;

- tariff classification (at least 6 level digit),

- CIF value, in United States of America dollars, and

- percentage on the total value of the final product; and

(iv) description of the manufacturing process.

2. The description of the good in the sworn origin declaration, which certifies the fulfilment of the origin requirementsset out in these Rules, shall correspond to the respective tariff classification, as well as with the description ofthe good in the commercial invoice and in the Certificate of Origin.

3. If the goods are regularly exported and their manufacturing process, as well as their materials are not modified,the Sworn Declaration of the Producer may be valid for a period of up to one year counted from the date of theissue of the certificate.

4. The Origin Certificate shall be issued not later than five (5) working days after the request presentation and itshall be valid for a period of one year from the date of its issue.

5. The origin certificates shall not be issued before the date of the issue of the commercial invoice relating to theconsignment, but in the same date or within the following sixty (60) days.

6. The requesting party and the certifying offices or authorized institutions shall keep the documents supportingthe origin certificates for a period no less than five (5) years, from the date of its issue. The certifying officesor the said institutions shall enumerate the certificates issued by them in sequential order.

7. The certifying offices or authorized institutions shall keep a permanent record of all issued origin certificates,which shall contain at least the certificate number, the requesting entity�s name and the date of its issue.

SECTION IV

Control and Verification of Certificates of Origin

Rule 17

1. Regardless of the presentation of an origin certificate in accordance with the Rules of Origin under these Rules,the customs authorities of the importing Party may, in the cases of reasonable doubt, request the relevantgovernment authorities of the exporting Party any additional information necessary for the verification of theauthenticity of a certificate, as well as the veracity of the information contained therein. This shall not precludethe application of the respective national legislation relating to breach of customs law.

2. Compliance with the request for additional information according to this Article shall only be made with referenceto the registers and documents available in Government offices or institutions authorized to issue origin certificates.Copies of the documentation necessary for the issuing of origin certificates can be made available.

3. This Article, however, does not restrain the conclusion of Customs Cooperation Agreements between the Parties.

4. The reasons for the doubts concerning the authenticity of the certificate or the veracity of its data shall be putforward in a clear and concrete way. For this purpose, the consultations thereon shall be carried out by a specificoffice of the customs authorities designated by each Party.

5. The customs authorities of the importing Party shall not suspend the importation operations of the goods. However,they may deny preferential tariff treatment, request a guarantee in any of its modalities or may take any actionnecessary in order to preserve fiscal interests, as a pre�condition for the completion of the importation operations.

6. If a guarantee is required, its amount shall not be higher than the value of the applicable custom duties concerningthe importation of the product from third countries, according to the legislation of the importing country.



Rule 18

The competent authorities from the exporting Party shall provide the requested information according to Article 17within thirty (30) days, from the date of the receipt of the request. Such period can be extended through mutualconsultation for a period no more than thirty (30) days in justified cases. If this information is satisfactory, the saidauthorities shall release the importer from the guarantee referred to in Article 17 within thirty (30) days or shallpromptly refund the duty paid in excess, in accordance with domestic laws of the Parties.

Rule 19

The information obtained under the conditions of the present Chapter shall be confidential in character, in accordancewith its law, and shall protect such information from disclosure that could prejudice the competitive position of thepersons providing the information. It shall be utilized with a view to clarifying the matter under investigation by thecompetent authorities of the importing Party as well as during the investigation and legal proceedings.

Rule 20

In the cases in which the information requested under Article 17 is not provided within the deadline established inArticle 18 or is insufficient to clarify any doubt concerning the origin of the good, the competent authorities of theimporting Contracting Party may initiate an investigation on the matter within sixty (60) days, from the date of therequest for the information.

Rule 21

1. During the period of investigation, the customs authorities of the importing Party shall not suspend new importingoperations relating to identical goods from the same exporter or producer. However, they may deny preferentialtariff treatment, request a guarantee in any of its modalities or may take any action necessary in order to preservefiscal interests, as a pre�condition for the completion of new importation operations.

2. The guarantee amount, whenever it is requested, shall be established according to Article 17. (6)

Rule 22

The customs authorities of the importing Party shall immediately notify the importer and the competent authorities ofthe exporting Party of the initiation of the origin investigation, in accordance with the procedures established inArticle 23.

Rule 23

1. During the investigation proceedings, the competent authorities of the importing Party may :

(a) request, through the competent authorities of the exporting Party, new information, as well as any copy of thedocumentation in possession of the certifying offices or authorized institutions which issued the origin certificateunder investigation, according to Article 17, which may be deemed necessary for verifying the authenticity ofthe said certificates and the veracity of the information contained therein. In such a request, the number andthe date of the issue of the origin certificate under investigation shall be indicated;

(b) for the purposes of verification of the contents of the local or regional added value, the producer or exportershall facilitate the access to any information or documentation necessary for establishing the CIF value of thenon�originating goods used in the production of the goods under investigation;

(c) for the purposes of verification of the characteristics of certain production processes, the exporter or producershall facilitate the access to any information and documentation that allow the confirmation of such processes;

(d) send to the competent authorities of the exporting Party a written questionnaire to be passed on to theexporter or producer, indicating the origin certificate under investigation;



(e) request to the competent authorities of the exporting Parties to facilitate visits to the premises of the producer,with a view to examining the production processes, as well as the equipment and tools utilized in the manufactureof the product under investigation;

(f) the competent authorities of the Contracting Party shall accompany the authorities of the importing ContractingParty in their above�mentioned visit, which may include the participation of specialists who shall act asobservers. Each Party could designate specialists, who shall be neutral and have no interest whatsoever inthe investigation. Each Party may deny the participation of such specialists whenever the latter represent theinterests of the companies or institutions involved in the investigation;

(g) once the visit is concluded, the participants shall subscribe the minutes of it, in which it shall be indicated thatit was carried out according to the conditions established in these Rules. The said minutes shall contain, inaddition, the following information: date and place of the carrying out of the visit; identification of the origincertificates which led to the investigation; identification of the goods under investigation; identification of theparticipants, including indications of the organs and institutions to which they belong; a visit report;

(h) the exporting Party may request the postponement of a verification visit for a period not more than thirty (30)days; and

(i) carry out other actions as agreed upon between the Parties involved in the case under investigation.

Rule 24

The competent authorities of the exporting Party shall provide the information and documentation requested accordingto Article 23(a) and d), within thirty (30) days from the date of the receipt of the request.

Rule 25

Regarding the proceedings as foreseen in Article 23, the competent authorities of the importing Party may requestthe competent authority of the exporting Party the participation or advice of specialists concerning the matter underinvestigation.

Rule 26

In the cases in which the information or documentation requested to the competent authorities of the exporting Partyis not produced within the stipulated deadline, or if the answer does not contain enough information or documentationfor determining origin, the authenticity or veracity of the origin certificate under investigation, or still, if the producersdo not agree to the visit, the competent authorities of the importing Party may consider that the products underinvestigation do not fulfil the origin requirements, and may, as a result deny preferential tariff treatment to theproducts mentioned in the origin certificate under investigation according to Article 20, and thus conclude suchinvestigation.

Rule 27

1. The competent authorities of the importing Party shall engage to conclude the investigation in a period not morethan ninety (90) days, from the date of the receipt of all the information requested in accordance with Article 23.

2. lf it is considered that new investigative actions or the presentation of more information are necessary, thecompetent authorities of the importing Party shall communicate the fact to the competent authorities of theexporting Party. The term for the execution of such new actions or for the presentation of additional informationshall be not more than ninety (90) days, from the date of the receipt of all the additional information, according toArticle 23.

3. If the investigation is not concluded within ninety (90) days after all the information has been provided, the importershall be released from the payment of the guarantee, regardless of the continuation of the investigation. Dutiespaid in excess shall be promptly refunded in accordance with the domestic legislation of the Parties.



Rule 28

1. The customs authorities of the importing Party shall inform the importers and the competent authorities of the

exporting Party of the conclusion of the investigation process, as well as the reasons that led to its decision.

2. The customs authority of the importing Party shall grant the competent authority of the exporting Party, access to

the investigation files, in accordance with its legislation.

Rules 29

During the investigation process, occasional modifications in the manufacturing conditions made by the companies

under investigation shall be taken into account for future shipments.

Rule 30

Once the investigation for the qualification of the origin concludes with a determination in favour of the importer, the

importer shall be released from the guarantees requested in Articles 17 and 21, within no more than thirty (30) days

or shall be promptly refunded the duties paid in excess in accordance with the domestic legislation of the Parties.

Rule 31

1. Once the investigation establishes the non�qualification of the origin criterion of the goods contained in the origin

certificate, the duties shall be levied as if the goods were imported from third countries and the sanctions foreseen

in this Agreement and/or the ones foreseen in the legislation in force in each Party shall be applied.

2. In such a case, the competent authorities of the importing Party may deny preferential tariff treatment to new

imports relating to identical good from the same producer, until it is clearly demonstrated that the manufacturing

conditions were modified so as to fulfil the origin requirements of the Rules of Origin of.

3. Once the competent authorities of the exporting Party has sent the information demonstrating that the manufacturing

conditions were modified and goods fulfil the origin criterion, the competent authorities of the importing Party shall

have forty five (45) days, from the date of the receipt of the said information, to communicate its decision there

upon, or a maximum of ninety (90) days if a new verification visit to the producer's premises, according to

Article 23 (e), is deemed necessary.

4. lf the competent authorities of the importing and the exporting Parties fail to agree on the demonstration of the

modification of the manufacturing conditions, they may make use of the Dispute Settlement Procedure established

as per Article XVIII of the Preferential Trade Agreement between the Republic of India and the Republic of Chile.

Rule 32

1. A Party may request another Party to investigate the origin of a good imported by the latter from other Party,

whenever there are well�founded reasons for suspecting that its products undergo competition from imported

products with preferential tariff treatment which do not fulfil the Origin Rules of this Agreement.

2. For such purposes, the competent authorities of the Party requesting the investigation shall bring to the notice of

the authorities of the importing Party the relevant information within forty five (45) days, from the date of the

request. Once this information is received, the importing Contracting Party may initiate the proceedings established

in this Rules, giving notice of this to the Party that requested the initiation of the investigation.

Rule 33

The proceedings of verification and control of origin as foreseen in these Rules may also apply to the goods already

cleared for home consumption.


Rule 34

1. Within sixty (60) days, from the receipt of the communication as provided in Article 28 or in the third paragraph of

Article 31, in case the measure is inconsistent, the exporting Party may request for consultation to the Committee,

stating the technical and legal reasons that would indicate that the measure adopted by the competent authorities

of the importing Party are not consistent with these Rules; and/or request a technical advice with the aim of

establishing whether the goods under investigation fulfil the origin rules of this Agreement.

Rule 35

The time periods set in these Rules shall be calculated on a consecutive day basis as from the day following the fact

or event which they refer to.

Rule 36 Penalties

Each Party shall adopt or maintain measures that provide for the imposition of civil, administrative, and, where

appropriate, criminal sanctions for violations of its customs laws and regulations, including those governing tariff

classification, customs valuation, rules of origin, and the entitlement to preferential tariff treatment under this Agreement.

Appendix

Certificate of Origin

Printing instructions

1. Each form shall measure 210 x 297 mm; a tolerance of up to minus 5 mm or plus 8 mm in the length may be

allowed. The paper used must be white, sized for writing, not containing mechanical pulp and weighing not less

than 25 g/m2.

2. The competent governmental authorities of Chile and India may reserve the right to print the forms themselves or

may have them printed by approved printers. In the latter case, each form must include a reference to such

approval. Each form must bear the name and address of the printer or a mark by which the printer can be

identified. It shall also bear a serial number, either printed or not, by which it can be identified.

Procedure for completion

The exporter shall fill out both the certificate of origin and the sworn declaration. These forms shall be completed in

English in which this Agreement is drawn up and in accordance with the provisions of the domestic law of the

exporting country. If they are hand-written, they shall be completed in ink in printed characters.

Notes

1. The certificate must not contain erasures or words written over one another. Any alterations must be made by

deleting the incorrect particulars and adding any necessary corrections. Any such alteration must be initialed by

the person who completed the certificate and endorsed by the competent governmental authority of the issuing

country.

2. No spaces must be left between the items entered on the certificate and each item must be preceded by an item

number. A horizontal line must be drawn immediately below the last item. Any unused space must be struck

through in such a manner as to make any later additions impossible.

3. Goods must be described in accordance with commercial practice and with sufficient detail to enable them to be

identified.



Certificate of Origin

Serial Number :

1. Exporter (name, full address, Country) 2. Producer (name, full address, Country)

ID No. ID No.

3. Importer (name, full address, country) 4. Observations

5. Port of Shipment 6. Country of origin

7. Description of Goods (1); Marks and numbers; [8. HS Number (Six Digit Code)]

Number and kind of packages (2). 9. Gross mass (kg) or other measure

(liters, m³, etc.)

10. Origin Criterion (3) 11.Invoices (No. and date and Value)

12. Competent Governmental Authority Enorsement 13.Declaration by the Exporter

Declaration certified I certify that :

Competent Governmental � The information on this document is true

Office : _________________________________ and accurate and I assume the responsi-

Issuing country : __________________________ bility for providing such representations.

I understand that I am liable for any false

Stamp. statements or material omission made on

or in connection with this document.

Place and date ____________________________ � I agree to maintain and present upon request,

_____________________________ documentation necessary to support this

certificate, and to inform, in writing, all

to whom the certificate was given of any

changes that could affect the accuracy or

(Signature) validity of this certificate.

� The goods originated in the territory of the

Parties, and comply with the origin require-

ments specified for those goods in Chile-

India PREFERENTIAL TRADE

AGREEMENT, and there has been no

further production or any other operation

outside the territories of the Parties in

accordance with Section II Rule 3 No 1 of

the Agreement.

Place and Date _____________________

_____________________

(Signature)



1. The description of the products must be given in the box reserved for this purpose without leaving any blank lines.

Where the box is not completely filled, a horizontal line must be drawn below the last line of the description, the

empty space being crossed through.

2. If goods are not packed, indicate number of articles or state "in bulk" as appropriate.

3. Origin Criteria (Section II Rule 3 No. 1) for preference

The following goods shall be considered as originating from a Contracting Party :

(a) The goods wholly produced or obtained in the territory of the Contracting party as defined in Rule 5 of these

Rules;

(b) The goods not wholly produced in the territory of the Contracting Party, provided that the said products are

eligible under Rule 6 read with Rule 7 of these Rules.

Sworn Declaration

1. Producer Individual's name or company name 2. Observations

(name, full address, country) 4. Description of Goods, Marks and numbers;

ID No. Number and kind of packages.

3. Country of Origin (ref (1) and (2) of notes below

5. HS Number (Six Digit Code) 6. Gross mass (kg) or other measure

(liters, m³, etc.)

7. Preference Criterion 8. Invoice (No. and Date)

(S. No. 3 of notes below) (if known)

Declaration by the Producer

I, the undersigned, producer of the goods described overleaf, DECLARE that the above goods are originating and meet the

origin requirements established in this Agreement.

UNDERTAKE to submit, at the request of the appropriate authorities, any supporting evidence which these authorities may

require for the purpose of issuing a certificate of origin, and undertake, if required, to agree to any inspection of my accounts

and to any check on the processes of manufacture of the above goods, carried out by the said authorities;

REQUEST the issue of a certificate of origin for these goods.

______________________________

(Place and date)

______________________________

(Signature)

(1) The description of the products must be given in the box reserved for this purpose without leaving any blank lines.

Where the box is not completely filled, a horizontal line must be drawn below the last line of the description, the

empty space being crossed through Information relating to the good to be exported, which must indicate :

(i) materials, components and/or parts originating from the exporting Contracting Party;



(ii) materials, components and/or parts originating from the other Party indicating :

- origin;



- Percentage on the total value of the final product.

(iii) non�originating materials, components and/or parts indicating :

- Exporting Country;



- Percentage on the total value of the final product.

(iv) escription of the manufacturing process

(2) If goods are not packed, indicate number of articles or state "In bulk" as appropriate.

(3) Preference Criteria (Section II Rule 3 No. 1)

The following goods shall be considered as originating from a Contracting Party :

(a) The goods wholly produced or obtained in the territory of the Contracting party as defined in Article 5 of these

Rules;

(b) The goods not wholly produced in the territory of the Contracting Party, provided that the said products are

eligible under Rule 6 read with Rule 7 these Rules.

Sd/-

(S. P. RAO)


(F. No. 467/80/2004-Cus.V/ICD)




F. No. 268/30/2006-CX-8Government of IndiaMinistry of Finance


New Delhi

Circular No. 853/11/2007-CXDated 13th August, 2007

Refund of Excise Duty paid on purchase of excisable goods by Diplomatic Missions

The undersigned is directed to refer to the Board�s Circular No. 621/12/2002 dated 21.02.2002 on the above subject. Para 8

of this circular provides the time limit for filing refund claim to be one year from the date of purchase of the goods by the

diplomatic mission or consular office, as per the provisions of section 11B (1)of the Central Excise Act,1944 read with

explanation (B)(e). As per the prescribed procedure, such refund claims are received initially by the Ministry of External

Affairs (MEA), and are forwarded with required certification to the offices of the jurisdictional Assistant/Deputy Commissioner

of Central Excise. The claim is processed and refund cheques are sent to MEA for onward transmission to the diplomatic

missions/posts. However, certain instances were brought to the notice of the Board, wherein even though refund claims

were submitted to the MEA by the diplomatic missions within one year, but the claims became time-barred, as there was a

delay in forwarding the said claims to the jurisdictional Assistant/ Deputy Commissioner of Central Excise.

2. In order to avoid recurrence of such instances, Board has devised a new procedure for processing of these claims. The

revised procedure is that the refund claims would continue to be filed by the foreign missions with the MEA. However, vide

Notification No. 30/2007-CE(NT) dated 30.07.2007, the officer receiving the said claims has been designated as Assistant/

Deputy Commissioner of Central Excise for the limited purposes of receiving the claims under section 11B of the Act. It

would mean that the time limit of one year of filing refund claim would be the date of filing the claim with the authorized officer

of MEA. This would eliminate the issue relating to expiry of the statutory limit of one year by the time the claim is received

by the Assistant/Deputy Commissioner of Central Excise.

3. Further, a refund claim is required to be sanctioned within three months of receipt of claim and in case of delay in

payment of refund beyond 90 days, interest is required to be paid by the department under section 11BB of the Act. As per

the revised procedure, the statutory time limit of 3 months for sanction of refund (beyond which interest is payable) would

start from the date of receipt of copy of refund application by the MEA. However, in order to ensure that the jurisdictional

central excise officers have sufficient time to process/verify the claim, a time limit of 30 days has been fixed for MEA to

forward such refund claims to the concerned Assistant/ Deputy Commissioner of Central Excise along with their

recommendation. In case, there is delay in forwarding of such applications by the MEA beyond 30 days, which in turn

results in the sanction of refund claim beyond 3 months, then MEA would have to bear the incidence of interest payable to

the foreign missions in terms of section 11BB of the Central Excise Act. The interest payable by the MEA would be limited

to the number of days beyond the initial thirty days, taken by MEA to forward the said claim to the jurisdictional AC/DC. The

procedure for payment of such interest by the MEA is being worked out in consultation with the Pr. CCA, CBEC.

4. The protocol Division of the MEA is also being separately informed about the revised procedure.

Sd/-

(RAHUL NANGARE)




F. No. 137/85/2007-CX. 4Government of IndiaMinistry of Finance


New Delhi

Cirlcular No. 97/8/2007Dated 23rd August, 2007

Procedural issues in Service Tax-circular-reg.

Since the inception of the levy of service tax vide Chapter V of the Finance Act, 1994 (hereinafter called the Act) and rulesmade thereunder from time to time, a number of circulars/clarifications/instructions have been issued, for clarifying thescope of statutory provisions; providing legal interpretation of the provisions of the Act, the rules and the Notifications; andclarifying as well as prescribing the procedures to be followed for administration of Service Tax. Over a period of time, therehave been significant changes in law and procedures relating to Service Tax. While certain circulars/clarifications/instructionshave become redundant and anachronistic, new issues have arisen on account of changes in law and procedure. Thiscircular aims to consolidate the procedural issues relating to Service Tax, including those relating to availment andutilization of CENVAT credit. This circular supersedes all previous circulars/clarifications/instructions issued on thesesubjects. It is, however, clarified that this circular is intended only to clarify the scope of the Act and the rules, and therefore,in the event of any inadvertent inconsistency or contradiction between this circular and the provisions of the Act or the rules,the latter shall prevail.

2. Registration

2.1 As per the provisions of Section 69 of the Act and rule 4 of the Service Tax Rules, 1994 (hereinafter called theRules), every person providing a taxable service and liable to pay Service Tax is required to register with the CentralExcise/Service Tax Department (hereinafter called the department). Further, in a few cases liability to pay ServiceTax has been shifted to the service receiver or other specified person, in terms of Section 68(2) of the Act.

These cases are : -

(i) insurer in case of service provided by insurance agent;

(ii) person making payment of freight in such cases where a goods transport agency provides taxable service toa specified consignor and consignee;

(iii) asset management company or mutual fund, in case of service provided by a distributor to them;

(iv) where the service is provided to a person in India by any person from a country other than India; and

(v) body corporate or a firm located in India receiving sponsorship service.

In all these cases, the person liable to pay Service Tax shall be obliged to register with the department.

2.2 The turnover limit, i.e., the aggregate value of taxable service for threshold based exemption is, currently, Rs. 8 lakhin a year. However, a person availing of this exemption is required (under Section 69 of the Act, read with NotificationNo. 26/2005-ST) to register with the department on achieving a turnover of Rs. 7 lakh in a financial year in respectof all taxable services provided by him. The expression �aggregate value not exceeding the threshold value of Rs.8 lakh� has been defined in Notification No. 6/2005-ST.

2.3 An �input service distributor� is an office or establishment of a manufacturer of excisable goods or provider oftaxable service. It receives tax paid invoices/bills of input services procured (on which CENVAT credits can betaken) and distributes such credits to its units providing taxable services or manufacturing excisable goods. The



distribution of credit is subject to the conditions that,- (a) the credit distributed against an eligible document shallnot exceed the amount of Service Tax paid thereon, and (b) credit of Service Tax attributable to services used ina unit either exclusively manufacturing exempted goods or exclusively providing exempted services shall not bedistributed. An input service distributor is required (under Section 69 of the Act, read with Notification No. 26/2005-ST) to take a separate registration.

2.4 Application for registration is required to be made in Form ST-1 to the jurisdictional superintendent of CentralExcise/Service Tax within 30 days of levy of Service Tax on such service or, in case of an existing taxableservice, within 30 days of the commencement of provision of such service. A person providing more than onetaxable service is required to take only one single Registration. He should indicate all taxable services provided byhim in Form ST-1.

2.5 Any person liable to pay Service Tax, who,-

(a) provides taxable service from more than one premises;

(b) receives taxable services in more than one premises; or

(c) has more than one premises engaged in relation to such taxable service,

may seek centralised Registration, provided he does centralised billing or maintains centralised accounting inrespect of such taxable services in a premises. In certain cases the centralization can be at the zonal/regionallevel. In such case, each of such offices is to be registered individually. Such Registrations are to be grantedby the jurisdictional Commissioner where such offices/establishments are located.

2.6 The registration certificate will be granted by the department, in Form ST-2, within seven days of filing of anapplication complete and properly filled up. In case Registration certificate is not issued within seven days, theRegistration is deemed to have been granted. Registration No., also known as �Service Tax Code (STC)� is a fifteendigit PAN based number. First 10 digits of this number are the same as the PAN of such person. Next two digits are�ST�. Next three digits are serial numbers indicating the number of Registrations taken by the service taxpayeragainst a common PAN. In addition to PAN, another number, namely, �premises code� is also given (mentioned atSl. No. 5 of the Form ST-2). This number indicates the code of the jurisdictional Commissionerate, division, rangeand Sl. No. within the range. This number is issued for easy identification of location of Registration of the servicetaxpayer.

2.7 In case an existing registrant wishes to add any new premises to the centralized Registration or wishes to add newtaxable services in his Registration certificate or amend it as regards any other details, he may provide suchdetails to the jurisdictional Superintendent in Form ST-1, indicating only the amendment/rectification required to bemade in the Registration certificate, along with a copy of the original Registration certificate. In case the changesrelate to deletion of any premises or taxable service, the registrant may file an intimation on plain paper along withcopy of the registration certificate.

3. Payment of Service Tax

3.1 In terms of rule 6 of the Rules read with Section 68 of the Act, the Service Tax is required to be paid on monthlybasis by all service taxpayers, other than individuals or proprietary/partnership concerns who are required to payService Tax on quarterly basis. Service Tax liability for a particular month or quarter is to be discharged on thepayments towards the value of taxable service received during that month or quarter, as the case may be. It is tobe deposited by the 5th day of the month following the month or quarter for which Service Tax is paid. However,for the month/quarter ending March, the payment is required to be made by the 31st March itself by all taxpayers.

3.2 e-payment of Service Tax : The Service Tax can be paid electronically. For this, the service taxpayer should havean account in any branch of the designated banks. For availing of the facility of e-payment, the service taxpayershall obtain a user-ID and password from the designated bank in which he has the account. For e-payment, the


service taxpayer should log on to the web-site of the bank with his user-ID and password. He should then choosethe option of e-payment of Service Tax. On choosing this option, the service taxpayer would be guided to the e-payment portal wherein he would fill the challan for payment of Service Tax and would authorize payment ofService Tax by way of debit to his account. Thereafter, a copy of the acknowledgement would be generated for therecords of the service taxpayer. Subsequently, the bank would generate copies of challan and send a copy each tothe Pay and Accounts Officer (PAO) and the department.

4. Mandatory e-payment of Service Tax

4.1 The e-payment of Service Tax has been made mandatory w.e.f . 1.10.2006, (vide sub-rule (2) of rule 6 of theRules), for all assessees who have paid (in cash plus through CENVAT Credit) a Service Tax amounting to Rs. 50lakh or more in the preceding financial year or in the current financial year. The latter type of service taxpayers shallmake any further payment of Service Tax in cash (i.e. other than through credit), only through e-payment.

4.2 In case a taxpayer faces any procedural problems, he may contact the jurisdictional Service Tax/ central exciseoffice or the jurisdictional Commissioner, who would advise and extend all possible help to the taxpayers to complywith the requirement of mandatory e-payment. At the same time, such taxpayers should expeditiously completethe procedural formalities required at their end for availing of internet banking facility from designated banks andcomplying with this requirement.

4.3 For a person providing taxable service from more than one premises and where each of such premises has beenseparately registered with the department, the criterion of Rs. 50 lakh would apply to each of the registeredpremises individually in view of its separate legal identity. The same procedure would apply to a person payingService Tax on taxable services received by him. However, in case of a Large Taxpayer (those taxpayers associatedwith LTU), the cumulative Service Tax paid by all registered premises will be taken into account for working out theof Service Tax amount of Rs. 50 lakh. Similarly, if a person providing taxable service also receives taxableservices on which he is liable to pay Service Tax and has a single registered premises, the Service Tax amount ofRs. 50 lakh would be the total amount of Service Tax paid by him.

5. Issuance of invoices, bills, challans, consignment notes and other documents

5.1 In terms of the provisions of rules 4A and 4B of the Rules, every taxable service provider is required to issue adocument (i.e. invoice, bill or challan) within 14 days from either the date of completion of provision of service orreceipt of any service charges (whichever is earlier). Such document should be serially numbered and shouldcontain the name, address of the service provider and the service receiver, description, classification and value ofservice provided and Service Tax payable thereon. For complying with the requirements of CENVAT Credit Rules,(i.e., to facilitate availment of credit by the recipient of taxable service), the amount of �education cess� and�secondary and higher education cess� should be shown separately on the invoice. Further, STC No./RegistrationNo. of the service provider should also be mentioned on the invoice for this purpose.

5.2 An input service distributor is also required to issue such a document in favour of the recipient of the credit sodistributed. This document should also be serially numbered and should give the details of the invoices underwhich the taxable service has been received and the name, address and Registration No. of the input servicedistributor as well as of the recipient of the credit. The amount of credit distributed shall also be mentioned.

5.3 For service providers providing �banking & other financial services�, certain relaxations are available. For suchservice providers, the invoice need not be serially numbered. They are also exempted from mentioning the addressof the service receiver. Similar dispensation is available for input service distributors of such type of serviceproviders.

5.4 For providers of taxable service of transport of goods by road (i.e. goods transport agency) the invoice/bill/challanshould, in addition to the general information required (i.e. as mentioned in para 5.1), also contain the consignmentnote number, date and gross weight of the consignment.



5.5 Rule 4B of the Rules prescribes that the goods transport agency shall issue a consignment note, which would be

serially numbered and would contain the names of the consignor and consignee, the vehicle Registration Number,

details of goods transported, details of place of origin and destination, and the person (consignor/consignee/goods

transport agency) liable to pay Service Tax. In case of less container load (LCL) cargo, where the goods transport

agent is not aware of the vehicle Registration Number at the time when he receives the goods and issues consignmentnote, he may mention the non-availability of vehicle Registration Number on the copy issued to the consignor.

However, after he comes to know about the vehicle Registration Number, he should mention the same, consignment

note-wise, in the records maintained by him and produce the same in case of verification. Similarly, in case of

trans-shipment of goods en-route (i.e. where the goods covered under a consignment note are shifted from one

vehicle to another), the records of Registration Numbers of the vehicles carrying such goods under a consignment

note must be recorded as soon as the said information is available to the goods transport agent. These proceduralrelaxations are provided for such special cases only and, in all other cases, mention of vehicle Registration

Number on the consignment note, at the time of its issue would continue to remain a mandatory requirement.

6. Service Tax Return

6.1 The Service Tax Return is required to be filed under Section 70 of the Act read with rule 7 of the Rules, by 'any

person liable to pay the Service Tax'. This return is required to be filed on a half yearly basis, in Form ST-3. For the

periods from April to September and October to March, it must be filed by the 25th October and the 25th April

respectively. Further, �Input Service Distributor� is also required to file this return. Persons who are not liable to payService Tax (because of an exemption including turnover based exemption), are not required to file ST-3 return.

6.2 A single Service Tax Return should be filed (in Form ST-3) in respect of all taxable services provided by an

assessee. Detailed instructions for filling the return are given in the return form itself.

6.3 e-filing of return - The Service Tax Return can be filed electronically after logging into the

website www.servicetaxefiling.com. For this purpose, the assessee shall obtain user-ID and log-in password from

the department. A simple application may be made to the jurisdictional Central Excise Officer, giving details ofSTC No., and an �e-mail ID�. The department would communicate the �User ID�, and �password� along with technical

details required for accessing the relevant site and the procedure for making entries and other guidance as may be

necessary to the taxpayer by e-mail. While filing the return electronically, the service taxpayer must file details as

contained in Form ST-3 and that of duty paying challans. On submission of the completed return, a key number

and an acknowledgement would be generated by the system along with a copy of Form ST-3 and Challan, which

could be printed by the service taxpayer for his records. In case of any difficulty faced in e-filing, the servicetaxpayer may send an e-mail to the address specified by the Commissioner, explaining the difficulties and if a reply

is not received within two days, he may send an e-mail to [email protected]

6.4 Delay in filing of return : The return is required to be filed by the stipulated date as mentioned at para 6.1 above.

Delay in filing of return attracts late fee. The late fee presently prescribed vide rule 7C of the Rules, is (a) Rs. 500

for delay upto 15 days; (b) Rs. 1000 for delay between 15 days and 30 days; and (c) Rs. 1000 plus Rs. 100 per day

beyond 30 days, till the filing of return, not exceeding Rs. 2000/-. To avoid late fee, the taxpayer must ensure

timely filing of return. In case of returns filed late, the appropriate late fees should be paid at the time of filing thereturn, without waiting for any communication or notice from the department. Mere non-submission of evidence of

payment of late fee along with the return is, however, not a ground for refusal to allow filing of the return.

6.5 Filing of revised return : Rule 7B of the Rules prescribes that an assessee can submit a revised return within 60

days of filing of original return to rectify any mistake or omission. It may be noted that in such cases where an

assessee files a revised return, the limitation period for initiating any action for demanding the Service Tax not

paid/short paid/not levied/short levied would be computed from the date of filing of revised return.



7. Assessment

7.1 Normally, under self assessment scheme, the service taxpayer assesses his tax liability himself and pays the

same. However, if a service taxpayer is not in a position to determine the Service Tax liability, say, for the reason

that valuation or classification of taxable service or issue of admissibility of an exemption Notification cannot be

determined (or any such other reason) at the time of filing the return, he may opt for assessment of Service Tax on

provisional basis after obtaining an order from the jurisdictional Deputy Commissioner/Assistant Commissioner.

The assessment shall be made in terms of the said order and would continue to be provisional till the issue is

finalized. Upon finalization, there may be additional tax liability or refund. In such cases, the taxpayer would have

to either pay the differential amount of tax with interest or claim refund, as the case may be.

8. CENVAT Credit

8.1 With effect from 10.9.2004, under CENVAT Credit Rules, 2004, CENVAT Credit across goods and services has

been allowed. This circular deals only with certain commonly raised issues relating to certain provisions of these

rules that relate to Service Tax credit. The following are the issues which have been examined in this circular,-

(a) Issue : Whether a manufacturer or taxable service provider having credit balance in his account can utilize that

credit for payment of Service Tax on goods transport by road, as a consignor or as a consignee?

Comments : In terms of rule 3 (4) of the Rules, CENVAT credit can be utilized for the following payments :

(a) any duty of excise payable on any final product;

(b) ................��..

(c) ................��..

(d) Service Tax on any output service

In terms of the CENVAT Credit Rules, �output service� means any taxable service provided by the provider of

taxable service to the service receiver. Further, the definition of �provider of taxable service� includes a person

liable to pay Service Tax. Therefore, reading the two definitions in conjunction, it is clear that, to form �output

service�, taxable service has to be actually provided by the �provider of taxable service�. Even if due to a legal

fiction, a consignor or a consignee qualifies to fall under the definition of �a person liable to pay Service Tax�

(and consequently a �provider of taxable service�), it cannot be said that he has actually provided any taxable

service. The service provided by a Goods Transport Agent (GTA) for which the consignor or the consignee is

made liable to pay Service Tax does not become an �output service� for such consignor or the consignee.

Therefore, the Service Tax payable by the consignor or consignee on transportation of goods by road cannot

be paid through credit accumulated by such consignor or consignee. For example, a manufacturer of steel

sheets procures duty paid steel ingots as input and avails CENVAT credit of the excise duty paid on ingots.

He clears his finished goods, i.e., steel sheets on payment of excise duty and sends the same to his customer,

engaging the service of a goods transport agency. In this case, he pays Service Tax on service received by

him for transportation of the goods. However, the input credit taken on steel ingots cannot be used for payment

of Service Tax applicable to goods transport agency. The reason is that the such manufacturer (consignor) is

not the service provider. The transport service is being provided by the �goods transport agency� and the excise

assessee pays the Service Tax only for the reason that the liability for payment of Service Tax has been

shifted to the service receiver. Accordingly, the consignor or the consignee has to be pay Service Tax in cash

on goods transport by road service.

(b) Issue : Whether a consignee can take credit of the amount paid as Service Tax either by himself (as consignee)

or by the consignor or by the Goods Transport Agency?



Comments : As per Rule 3 of the CENVAT Rules, 2004, CENVAT Credit of, inter alia, Service Tax leviable

and paid on any �input services� can be taken. The rule does not distinguish as to who (i.e. the GTA, the

consignor or the consignee himself) has paid the aforesaid tax. The only condition required to be satisfied is

that the consignee must be a manufacturer of excisable goods or a provider of taxable service and the service

must be in the nature of �input service� for such activity. In case of inward transportation of inputs or capital

goods, such service (being specifically mentioned under the definition of �input service�) would qualify to be

called as �input service� and, thus, the Service Tax paid (by any of the persons mentioned above) on it would

be eligible as credit to the receiver if he is either a manufacturer of excisable goods or a provider of taxable

service.

(c) Issue : Up to what stage a manufacturer/consignor can take credit on the Service Tax paid on goods transport

by road?

Comments : This issue has been examined in great detail by the CESTAT in the case of M/s. Gujarat Ambuja

Cements Ltd. vs CCE, Ludhiana [2007 (006) STR 0249 Tri-D]. In this case, CESTAT has made the following

observations :-

�the post sale transport of manufactured goods is not an input for the manufacturer/consignor. The two clauses in

the definition of �input services� take care to circumscribe input credit by stating that service used in relation to

the clearance from the place of removal and service used for outward transportation upto the place of removal

are to be treated as input service. The first clause does not mention transport service in particular. The second

clause restricts transport service credit upto the place of removal. When these two clauses are read together,

it becomes clear that transport service credit cannot go beyond transport upto the place of removal. The two

clauses, the one dealing with general provision and other dealing with a specific item, are not to be read

disjunctively so as to bring about conflict to defeat the laws� scheme. The purpose of interpretation is to find

harmony and reconciliation among the various provisions�.

Similarly, in the case of M/s Ultratech Cements Ltd vs CCE Bhavnagar 2007-TOIL-429-CESTAT-AHM, it was

held that after the final products are cleared from the place of removal, there will be no scope of subsequent

use of service to be treated as input. The above observations and views explain the scope of the relevant

provisions clearly, correctly and in accordance with the legal provisions. In conclusion, a manufacturer/consignor

can take credit on the Service Tax paid on outward transport of goods up to the place of removal and not

beyond that.

8.2 In this connection, the phrase �place of removal� needs determination taking into account the facts of an individual

case and the applicable provisions. The phrase �place of removal� has not been defined in CENVAT Credit Rules.

In terms of sub-rule (t) of rule 2 of the said rules, if any words or expressions are used in the CENVAT Credit Rules,

2004 and are not defined therein but are defined in the Central Excise Act, 1944 or the Finance Act, 1994, they

shall have the same meaning for the CENVAT Credit Rules as assigned to them in those Acts. The phrase �place

of removal� is defined under Section 4 of the Central Excise Act, 1944. It states that,-

�place of removal� means-

(i) a factory or any other place or premises of production or manufacture of the excisable goods;

(ii) a warehouse or any other place or premises wherein the excisable goods have been permitted to be stored

without payment of duty;

(iii) a depot, premises of a consignment agent or any other place or premises from where the excisable goods are

to be sold after their clearance from the factory;

from where such goods are removed.�



It is, therefore, clear that for a manufacturer/consignor, the eligibility to avail credit of the Service Tax paid on the

transportation during removal of excisable goods would depend upon the place of removal as per the definition. In

case of a factory gate sale, sale from a non-duty paid warehouse, or from a duty paid depot (from where the

excisable goods are sold, after their clearance from the factory), the determination of the �place of removal� does

not pose much problem. However, there may be situations where the manufacturer/consignor may claim that the

sale has taken place at the destination point because in terms of the sale contract/agreement (i) the ownership of

goods and the property in the goods remained with the seller of the goods till the delivery of the goods in acceptable

condition to the purchaser at his door step; (ii) the seller bore the risk of loss of or damage to the goods during

transit to the destination; and (iii) the freight charges were an integral part of the price of goods. In such cases, the

credit of the Service Tax paid on the transportation up to such place of sale would be admissible if it can be

established by the claimant of such credit that the sale and the transfer of property in goods (in terms of the

definition as under Section 2 of the Central Excise Act, 1944 as also in terms of the provisions under the Sale of

Goods Act, 1930) occurred at the said place.

8.3 A doubt has been raised regarding admissibility of CENVAT credit on Service Tax paid in respect of mobile phones.

In the Service Tax Credit Rules, 2002, it was prescribed that credit of Service Tax was admissible only on telephone

connection installed in the business premises. A clarification to this effect was also issued vide Circular No. 59/8/

2003-ST, dated 20.6.2003, in the context of the Service Tax Credit Rules, 2002. However, in the CENVAT Credit

Rules, 2004 no such condition has been prescribed. Therefore, w.e.f. 10.9.2004, credit of Service Tax paid in

respect of mobile telephone service is admissible, provided the mobile phone is used for providing output service or

used in or in relation to manufacture of finished goods.

8.4 Input service distributor is an office or premises of the manufacturer or taxable service provider which receives

bills/invoices etc., of input services. The input service distributor can distribute the eligible credit to any unit of the

manufacturer or any premises/office of taxable service provider.

9. Delay in payment of Service Tax

9.1 Delay in payment of Service Tax, including a part thereof, attracts simple interest in terms of Section 75 of the Act.

The rate of interest is as prescribed from time to time, in accordance with this Section. At present, the rate of

interest is 13% per annum (Notification No. 26/2004-ST, dated 10.9.2004). Further, failure to pay Service Tax also

attracts a penalty under Section 76 of the Act, which shall not be less than Rs. 200 for every day during which such

failure continues or at the rate of 2% of such tax per month, which ever is higher, starting with the first day after the

due date till the date of actual payment of the outstanding amount of Service Tax. However, such penalty would not

exceed the Service Tax payable.

10. Any amount recovered by any person as Service Tax

10.1 Any amount collected by a person as Service Tax from any other person, even if it was not permissible in terms of

the Service Tax law, is required to be deposited with the Central Government. In other words, no amount collected

as Service Tax shall be retained by the person who has collected such amount. Any delay in depositing such

amount attracts simple interest at the rate prescribed under Section 73 B of the Act. At present, the rate of interest

is 13% per annum (Notification No. 8/2006-ST, dated 19.4.2006).

11. Audit

11.1 The selective audit of service taxpayers and other assessees like input service distributors, may be done by the

jurisdictional Central Excise officer (authorized for the purpose) or by an audit party deputed by the Comptroller and

Auditor General of India. Rule 5 of the Rules makes it mandatory for every assessee to make available the

records, on demand, for inspection and examination to such authorized person/audit party.



12. Adjudication of cases

12.1 Section 73 of the Act deals with adjudication of cases of short-levy or non-levy of Service Tax or Service Tax shortpaid or not paid or erroneously refunded. For quick settlement of disputes, this Section prescribes that (i) in othercases involving fraud, collusions, wilful misstatement and suppression of facts etc., the dispute could be settledby making payment of the Service Tax amount specified in the notice along with interest and penalty equal to 25%of Service Tax amount, within thirty days of issue of show cause notice; (ii) and in any other case the personchargeable to Service Tax, or to whom Service Tax has been erroneously refunded, may make payment suo motoalong with interest, as applicable, and, consequently no Show Cause Notice will be served in respect of the amountso paid.

12.2 Section 83A confers powers on the Central Excise Officer for adjudging a penalty under the provisions of the saidAct or the rules made there under. Board has specified monetary limits for adjudication of cases under Section 83Aof the said Act vide Notification No. 30/2005- Service Tax dated 10th August, 2005. The monetary limits are asfollows :

S. No. Central Excise Officer Amount of Service Tax or CENVAT creditspecified in a notice for the purpose ofadjudication under Section 83A

(1) (2) (3)

(1) Assistant Commissioner of Central Excise or Not exceeding Rs. 5 lakhDeputy Commissioner of Central Excise

(2) Joint Commissioner of Central Excise Above Rs. 5 lakh but not exceeding Rs. 20 lakh

(3) Additional Commissioner of Central Excise Above Rs. 20 lakh but not exceeding Rs. 50 lakh

(4) Commissioner of Central Excise Without limit.

The monetary limits specified in the above tables for adjudication of Service Tax cases are irrespective of whetheror not such cases involve fraud, collusion, wilful mis-statement, suppression of facts or contravention of any of theprovisions of the Act or the rules made thereunder with an intent to evade payment of Service Tax and whether ornot extended period has been invoked. Cases not involving non-payment of Service Tax or mis-utilization ofCENVAT credit are to be adjudicated by the Assistant Commissioner of Central Excise or Deputy Commissionerof Central Excise.

12.3 Where different cases involving the same issue are due to be adjudicated in a Commissionerate, all such casesmay be adjudicated by the Central Excise Officer competent to decide the case where the Service Tax or CENVATcredit involved is of the highest amount.

12.4 For cases where the appellate authority remands the case for de-novo adjudication, specifically mentioning theauthority that has to adjudicate the case, then such authority specified in the said appellate order should adjudicatesuch cases. Where the appellate authority does not specifically mention any adjudicating authority, it should bedecided by the authority competent in terms of the monetary limits mentioned in para 12.1.

12.5 Central Board of Excise & Customs (CBEC) has directed that in respect of demands for an amount upto onethousand rupees towards short payment/non-payment of Service Tax, if the service provider, on the default beingpointed out, pays the Service Tax along with interest within a period of one month of the default in payment, thepenalty should be waived, taking recourse to the provisions under Section 80 of the Act. In other cases, i.e. whereamount of Service Tax involved is over Rs. one thousand, penal action prescribed under Sections 76, 77 and 79would be attracted.



13. Revision of orders

13.1 The adjudication order passed by the officers subordinate to the Commissioner of Service Tax can be revised bythe Commissioner after causing such inquiry as he deems fit, in terms of Section 84 of the Act. The limitation periodfor issuing such revisional order is two years from the date on which the original order was passed. However, anyissue against which an appeal has been filed by the service taxpayer before Commissioner (Appeals) cannot berevised. Thus, if an order deals with several issues and the party files an appeal only in respect of a few issues, theCommissioner may pass revisional order in respect of only such remaining issues against which an appeal has notbeen filed by the party. The principles of natural justice shall be followed while passing an order in revision.

14. Appeal provisions

14.1 A service taxpayer aggrieved by any order passed by an adjudicating authority lower than the Commissioner, mayfile an appeal before the Commissioner (Appeals). Such appeal shall be filed within three months of the communicationof the original order to the party. An appeal against an order of the Commissioner, including an order in revision, andagainst an order of the Commissioner (Appeals) lies with the Appellate Tribunal (CESTAT).

15. Other frequently asked question on procedural issues

15.1 For other frequently asked questions on procedural issues, the information available on website www.cbec.gov.in(FAQ in Service Tax) may be referred to.

16. Trade and field formations may be informed accordingly.

Sd/-(GAUTAM BHATTACHARYA)Commissioner (Service Tax)

[F. No. 137/85/2007-CX.4]



Export Finance


Reserve Bank of IndiaForeign Exchange Department

Central Office, Mumbai 400 001

A. P. (DIR Series) Circular No. 75

Dated 14th June, 2007

Overseas Direct Investment- Liberalisation

Attention of Authorised Dealer Category - I (AD Category - I) banks is invited to Notification No.FEMA120/RB-2004 dated

July 7, 2004, [Foreign Exchange Management (Transfer or Issue of Any Foreign Security) Regulations, 2004 as amended

from time to time (the Notification). As announced in the Annual Policy Statement for the Year 2007-08 (paras 132,133 and

134), the Regulations governing overseas investments have further been liberalised as under :

1. Enhancement of limit for Overseas Direct Investment (para 132)

In terms of Regulation 6 of the Notification ibid, the total overseas investment of an Indian party in all its Joint Ventures

(JVs) and/or Wholly Owned Subsidiaries (WOSs) abroad engaged in any bonafide business activity should not exceed

200 per cent of its net worth. In order to provide greater flexibility to Indian parties (companies incorporated in India or

created under an Act of Parliament) for investments abroad, the existing limit of 200 per cent of the net worth of the

Indian party has been enhanced to 300 per cent of the net worth. However, the limit applicable to registered partnership

firms for overseas investment will continue to be 200 per cent of their net worth. Accordingly, AD Category � I banks

may allow overseas investments under the Automatic Route up to 300 per cent of the net worth of the Indian party

(other than registered partnership firms), as on the date of the last audited balance sheet.

2. Financial Commitment for overseas investment � guarantees issued by an Indian Party to or on behalf of the

JV WOS (para 132)

In terms of Regulation 2(f) of the Notification ibid, 'financial commitment' means the amount of direct investment by

way of contribution to equity, loan and 50 per cent of the amount of guarantees issued by an Indian party to or on behalf

of its overseas Joint Venture Company (JV) or Wholly Owned Subsidiary (WOS). As a measure of rationalisation of the

extant norms, it has been decided to reckon 100 per cent of the amount of guarantees issued by an Indian party for

determining the 'financial commitment' for overseas investment by an Indian party. Accordingly, 'financial commitment'

for overseas investment by an Indian party would, henceforth, mean direct investment by way of contribution to equity,

loan and the total amount of guarantees by the investing company/promoter company/group company/sister concern

or associate company/partnership firm in India. The revised norms will be applicable, with immediate effect, for both

new and existing investments.

3. Portfolio Investment by Listed Indian Companies (para 134)

In terms of Regulation 6B of the Notification ibid, listed Indian companies are permitted to invest up to 25 per cent of

their net worth in the equity of listed foreign companies, which are listed on a recognised stock exchange and having

shareholding of at least 10 per cent in Indian companies listed on a recognised stock exchange in India and rated

bonds/fixed income securities issued by overseas companies, under the portfolio investment scheme. In order to



provide greater opportunities to listed Indian companies for portfolio investments, the existing limit of 25 per cent has

been enhanced to 35 per cent of the net worth of the investing company as on the date of its last audited balance

sheet. All other terms and conditions stipulated in Regulation 6B of the Notification shall remain unchanged.

4. AD Category � I banks may bring the contents of this circular to the notice of their constituents and customers concerned.

5. Necessary amendments to Notification No.FEMA120/RB-2004 dated July 7, 2004, [Foreign Exchange Management

(Transfer or Issue of Any Foreign Security)] are being notified separately.

6. The directions contained in this circular have been issued under sections 10(4) and 11(1) of the Foreign Exchange

Management Act 1999 (42 of 1999) and is without prejudice to permissions/approvals, if any, required under any other law.

Sd/-

(SALIM GANGADHARAN)

Chief General Manager





Notification No. FEMA 154/2007-RB


Foreign Exchange Management (Foreign Currency Account by a Person Resident in India)

(Amendment) Regulations, 2007

In exercise ofthe pwoers conferred by clause (b) of Section 9 and cluase (e) of Sub-Section (2) of Section 47 of the ForeignExchange Management Act, 1999 (42 of 1999) the Reserve Bank of India makes the following amendments to ForeignExchange Management (Foreign Currency Accounts by a Person Resident in India) Regulations, 2000 (Notification No.FEMA 10/2000-RB dated 3rd May, 2000), as amended from time to time, namely :

1. Short Title and Commencement : (i) These Regulations may be called the Foreign Exchange Management (ForeignCurrency Accounts by a Person Resident in India) (Amendment) Regulations, 2007.

(ii) They shall be deemed to have come into force from the date(s) specified hereunder.

2. Amendment of the Regulations :- In the Foreign Exchange Management (Foreign Currency Accounts by a PersonResident in India), Regulations, 2000 (hereinafter called �the principal regulations�)

(1) in the Schedule, for paragraph (1), the following paragraph shall be substituted, namely :

�(1) A person resident in India may credit to the EEFC Account with an Authorised Dealer in India 100 per cent ofthe foreign exchange earnings as specified in sub-paragraph (1A).�

This shall be deemed to have come into force with effect from 30th November, 2006.

(2) in regulation 7, sub-regulation 4A the proviso, in caluse (b)

(a) in sub-clause (i) for the figure �2� the figure �10� shall be substituted.

(b) in sub-clause (ii) for the figure �1� the figure �5� shall be substituted.

This shall be deemed to have come into force with effect from 21st April, 2006.

(3) in regulation 7, in sub-regulation 4A, in the proviso, in caluse (b), sub-clause (i) and sub-clause (ii)�shall besubstituted by the following, namely�

�(i) 15 per cent of the average annual sales income or turnover of the Indian entity during the last two financialyears or up to 25 per cent of the net worth, whichever is higher, where the remittances are made to meet initialexpenses of the branch or office or representative.

and

(ii) 10 per cent of such average annual sales/income or turnover during the last financial years where the remittancesare made to meet recurring expenses of the branch or office or representative;�

This shall be deemed to have come into force with effect from 4th December, 2006.

Sd/-(SALIM GANGADHARAN)


G.S.R.455(E)

F. No. 1/23/EM/2000-Vol.IV


Footnote :

(i) It is clarified that no person will be adversely affected as a result of retrospective effect being given to these Regulations.

(ii) The Principal Regulations were published in the Official Gazette vide No. G. S. R. 393(E) dated May 5, 2000 in Part II, Section

3, Sub-Section (I) and subsequently amended vide Nos.-

G.S.R. 675(E) dated August 25, 2000;

G.S.R. 89(E) dated February 12, 2001;

G.S.R. 103(E) dated February 19, 2001;

G.S.R. 200(E) dated March 21, 2001;

G.S.R. 5(E) dated January 2, 2002;

G.S.R. 261(E) dated April 9, 2002;

G.S.R. 465(E) dated July 2, 2002;

G.S.R. 474(E) dated July 8, 2002;

G.S.R. 755(E) dated November 8, 2002;

G.S.R. 756(E) dated November 8, 2002;

G.S.R. 224(E) dated March 18, 2003;

G.S.R. 398(E) dated May 14, 2003;

G.S.R. 452(E) dated June 3, 2003;

G.S.R. 453(E) dated June 4, 2003;

G.S.R. 11(E) dated January 7, 2004;

G.S.R. 13(E) dated January 7, 2004; and

G.S.R. 209(E) dated March 23, 2004.






Notification No. FEMA 155/2007-RB


Foreign Exchange Management (Acquisition and Transfer of ImmovableProperty Outside India) (Amendment) Regulations, 2007

In exercise of the powers conferred by clause (h) of Sub-Section (3) of Section 6 and Sub-Section (2) of Section 47 of the

Foreign Exchange Management Act, 1999 (42 of 1999), the Reserve Bank of India makes the following amendments to the

Foreign Exchange Management (Acquisition and Transfer of Immovable Property Outside India) Regulations, 2000 (Notification

No. FEMA 7/2000-RB dated 3rd May, 2000), as amended from time to time, namely :

1. Short Title and Commencement : (i) These Regulations may be called the Foreign Exchange Management

(Acquisition and Transfer of Immovable Property Outside India) (Amendment) Regulations, 2007.

(ii) They shall be deemed to have come intoforce with effect from December 4, 2006.

2. Amendment of the Regulations : In the Foreign Exchange Management (Acquisition and Transfer of Immovable

Property Outside India), Regulations, 2000 in Regulation 5, sub-regulation (3) shall be substituted, namely :

�(3) A company incorporated in India having overseas offices, may acquire immovable property outside India for its

business and for residential purposes of its staff, in accordance with the direction issued by the Reserve Bank of

India from time to time.

Sd/-

(SALIM GANGADHARAN)


G.S.R.456(E)

F. No. 1/23/EM/2000-Vol. IV

Footnote :

(i) It is clarified that no person will be adversely affected as a result of retrospective effect being given to these Regulations.

(ii) The Principal Regulations were published in the Official Gazette vide G.S.R. 390(E) dated May 5, 2000 in Part II, Section 3,

Sub-section (i) and subsequently amended vide No. GSR848(E) dated October 29, 2003.





RBI/2007-2008/117

A. P. (DIR Series) Circular No. 06Dated 17th August, 2007

Exim Bank's Line of Credit (LOC) of USD 5 million to theEastern African Development Bank, Kampala, Uganda

Export-Import Bank of India (Exim Bank) has concluded an agreement dated November 24, 2005 with the Eastern AfricanDevelopment Bank (EADB), Kampala, Uganda, making available to the latter, a Line of Credit (LOC) of USD 5 million (USDFive million only) for financing exports from India of equipment, eligible goods and services, which are eligible for exportunder the Foreign Trade Policy of the Government of India and whose purchase may be agreed to be financed by Exim Bankunder this agreement to member countries viz Uganda, Kenya and Tanzania.

2. The Credit Agreement under the LOC is effective from June 26, 2007. Under the LOC, the terminal date for openingLetters of Credit will be June 25, 2009 (24 months from the effective date) and the terminal date for disbursements will beDecember 25,2009 (30 months from the effective date).

3. Shipments under the credit will have to be declared on GR/SDF Forms as per instructions issued by Reserve Bank fromtime to time.

4. While no agency commission shall be payable in respect of exports financed under the above line of credit, Reserve Bankmay consider, on merit, requests for payment of commission up to a maximum extent of 5 per cent of the f.o.b. value inrespect of goods exported and which require after sales service. In such cases, commission will have to be paid bydeduction from the invoice of relevant shipment to the agents in member countries of EADB (Uganda, Kenya and Tanzania)and the reimbursable amount by the Exim Bank to the negotiating bank will be 90 per cent of the f.o.b./c.f.r./c.i.f. value.Approval for the payment of commission should be obtained before the relevant shipment is effected. In other cases (i.e.exports not involving after sales service), if the exporter is required to pay agency commission, he may use his ownresources or utilize the balance in his EEFC account for such payments in free foreign exchange. Authorised DealerCategory � I (AD Category � I) banks may allow such remittance after realisation of full payment of contract value subjectto compliance with the prevailing instructions on payment of agency commission.

5. AD Category - I banks may bring the contents of this circular to the notice of their exporter constituents and advise themto obtain full details of the Line of Credit from Exim Bank's office at Centre One, Floor 21, World Trade Centre Complex,Cuffe Parade, Mumbai 400 005.

6. The directions contained in this circular have been issued under sections 10(4) and 11(1) of the Foreign ExchangeManagement Act (FEMA), 1999 (42 of 1999) and is without prejudice to permissions / approvals, if any, required under anyother law.







RBI/2007-2008/118

A. P. (DIR Series) Circular No. 07Dated 22nd August, 2007

Rupee Loans to NRI Employees of Indian Companiesunder Employees Stock Option (ESOP) Scheme

1. As you are aware, banks are allowed to extend loans in Rupees to resident employees of an Indian company to purchaseshares of the company under Employees Stock Option (ESOP) Scheme, to the extent of 90 per cent of the purchase priceof the shares or Rupees 20 lakh, whichever is lower. Rupee loans extended by banks under ESOP Scheme is treated asbank's exposure to capital market, within the overall ceiling of 40 per cent of its net worth.

2. In terms of Regulation 7 of FEMA Notification No. 4/2000-RB dated 3rd May, 2000 [Foreign Exchange Management(Borrowing and Lending in Rupees) Regulations, 2000] as amended from time to time, AD banks are allowed to grant Rupeeloans to Non-Resident Indians (NRIs) for certain purposes, subject to conditions.

3. We have been receiving requests from banks for allowing them to grant Rupee loans to NRI employees of Indian companiesfor the purpose of buying shares of the companies under the ESOP scheme. The requests have been examined and it hasbeen decided to allow Authorised Dealer Category � I (AD Category � I) banks to grant Rupee loans to NRI employees ofIndian companies for acquiring shares of the companies under the ESOP Scheme. The loan scheme should be as per thepolicy approved by the bank�s Board and would further be subject to the following conditions :

(i) The loan amount should not exceed 90 per cent of the purchase price of the shares or Rupees 20 lakhs per NRIemployee, whichever is lower.

(ii) The rate of interest and margin on such loans may be decided by the banks, subject to the directives issued by theReserve Bank from time to time.

(iii) The amount shall be paid directly by the bank to the company and should not be credited to the borrowers� non-residentaccounts in India.

(iv) The loan amount should be repaid by the borrower by way of inward remittances or by debit to his NRO / NRE / FCNR (B)account.

(v) The loans will be included for reckoning capital market exposures and the bank will ensure compliance with prudentiallimits, prescribed by the Reserve Bank (DBOD) from time to time, for such exposure to capital market.

4. Necessary amendments to the Foreign Exchange Management (Borrowing and Lending in Rupees) Regulations, 2000 arebeing issued separately.

5. AD Category � I banks may bring the contents of this circular to the notice of their constituents and customers concerned.

6. The directions contained in this circular have been issued under Sections10 (4) and 11(1) of the Foreign ExchangeManagement Act, 1999 (42 of 1999) and is without prejudice to permissions/approvals, if any, required under any other law.



OFFICE BEARERSOF THE COUNCILCHAIRMAN

Rakesh Shah

Phone: Off : 91-33-22872511/22876640/

22874447/22804929

Res: 91-33-24071637/1638/24689706

Fax : Off : 91-33-22875104/22870780

Res: 91-33-24456925


[email protected]

VICE CHAIRMEN

Mahesh K. Desai

Phone: Off : 91-40-27617098/27615131

Res: 91-40-27765793

Fax : 91-40-27614376


Amanpreet Singh Chadha

Phone: Off : 91-22-66355155/56/57

Res: 91-22-23516865

Fax : 91-22-23854428


REGIONAL CHAIRMEN

Eastern Region

R. P. Sehgal

Phone: Off : 91-33-22803127/22878229/

22902256

Res: 91-33-22407094

Fax : 91-33-22899938


Northern Region

S. C. Ralhan

Phone: Off : 91-161-2673805/806/2670219

Res: 91-161-2670129/2672542

Fax : 91-161-2671049/2676817


Southern Region

B. Chandrasekharan

Phone: Off : 91-80-26570711/12

91-80-26570718 (D)

Res: 91-80-26764665

Fax : 91-80-26570713/14


[email protected]

Western Region

Nayan N. Shah

Phone: Off : 91-22-65702939/26763555

Res: 91-22-26207506

Fax : 91-22-28730291


EEPC OFFICES IN INDIAAND ABROADR. MaitraExecutive DirectorEngineering Export Promotion CouncilVandhna (4th Floor), 11 Tolstoy MargNew Delhi 110 001Tel. : 91-11-23353353, 23711124/25Fax : 91-11-23310920E-mail : [email protected] : www.eepcindia.org

HEAD OFFICEB. SarkarAddl. Executive Director & SecretaryEngineering Export Promotion CouncilVanijya Bhavan (1st Floor)International Trade Facilitation Centre1/1 Wood StreetKolkata 700 016Tel. : 91-33-22890651/52Fax : 91-33-22890654E-mail : [email protected] : www.eepcindia.org

TERRITORIAL DIVISIONVandhna (4th Floor)11 Tolstoy MargNew Delhi 110 001Tel. : 91-11-23353353, 23711124/25Fax : 91-11-23310920E-mail : [email protected]

REGIONAL OFFICESChennaiM. GanesanRegional DirectorGreams Dugar (3rd Floor)149 Greams RoadChennai 600 006Tel. : 91-44-28295501, 28295502Fax : 91-44-28290495E-mail : [email protected]

KolkataMs. Anima PandeyRegional DirectorVanijya Bhavan (2nd Floor)International Trade Facilitation Centre1/1, Wood StreetKolkata 700 016Tel. : 91-33-22890673/74Fax : 91-33-22890687E-mail : [email protected]

MumbaiRajat SrivastavaRegional DirectorCentre 1, 12th FloorWorld Trade CentreCuffe Parade, Mumbai 400 005Tel. : 91-22-22186655/56/60Fax : 91-22-22180119E-mail : [email protected] [email protected]

New DelhiShrikar DoleRegional DirectorSurya Kiran (4th Floor)19 Kasturba Gandhi MargNew Delhi 110 001Tel. : 91-11-23314171/74Fax : 91-11-23317795E-mail : [email protected]

SUB-REGIONAL OFFICESBangaloreC. H. NadigerAsst. DirectorVinayaka Complex (2nd Floor)44/45, Residency Road CrossBangalore 560 025Tel. : 91-80-25581396/25588669Fax : 91-80-25586914E-mail : [email protected]

HyderabadJ. V. Raja Gopal RaoAsst. Director�Soham Mansion� (1st Floor)No. 5-4-187/3 & 4/4, M. G. RoadSecunderabad 500 003Tel. : 91-40-27536704Telefax : 91-40-27536705E-mail : [email protected]

JalandharOpinder SinghAsst. DirectorPlot Comm. 1, Focal PointJalandhar 144 004Tel. : 91-181-2602264Fax : 91-181-2601124E-mail : [email protected]

[email protected]

FOREIGN OFFICESSingaporeD. D. Roy, Resident DirectorNo. 3, Shenton Way#07-02 Shenton HouseSingapore 068805Tel. : 65-62279282/83Fax : 65-62279284E-mail : [email protected]

South AfricaM. K. Sharma, Resident DirectorThebe House (1st Floor)166, Jan Smuts, RosebankJohannesburg-2196South AfricaTel. : 27-11-8802973Fax : 27-11-2374000E-mail : [email protected]

U.S.A.Rana Roy, Resident DirectorIndia Engineering Center1601 Feehanville Drive, Suite # 200Kensington Business CenterMount Prospect, IL, 60056, USATel. : 1-847-297-8500 (2 lines)Fax : 1-847-297-8502E-mail : [email protected]

Published by Shri R. Maitra, Executive Director, Engineering Export Promotion CouncilVanijya Bhavan (1st Floor), ITFC, 1/1 Wood Street, Kolkata 700 016

Editor : Shri R. Maitra