Policy
Circular No.35(RE-2000)/2000-2001
Dated:
19th December, 2000
Subject: Execution
of BG/LUT in respect of EPCG Licences.
Attention is invited to Para 4.19 of the Export and Import Policy,
1997-2002 (RE-2000), which stipulates that wherever any duty free import is
allowed or where otherwise specifically stated, the importer shall execute a
Legal Undertaking (LUT)/ Bank Guarantee (BG) with the Customs Authority before
clearance of goods through the Customs, in
the manner as may be prescribed by them. Attention
is also invited to para 4.24 of Handbook of Procedures.
References have been received from the exporters that some licensing
authorities are imposing condition of 100% Bank Guarantee (BG) in respect of
EPCG licences issued by them.
After consideration of the matter it has been decided that since the LUT/
BG in respect of licences where any duty free import has been allowed is to be
executed with the Customs authorities in the manner as may be prescribed by
them, the licensing authority should not impose any condition regarding the
quantum of Bank Guarantee in respect of EPCG licences issued by them. All the
licensing authorities are, therefore, advised that in respect of the quantum of
Bank guarantee amount they should only impose a condition on the EPCG Licences
issued by them, to the effect that the Bank Guarantee will be executed by the
EPCG Licence holder in terms of para 4.19 of the Export and Import Policy,
1997-2002 (RE-2000) with the Customs authorities concerned before clearance of
goods in the manner as may be prescribed by the Customs authorities.
This issues with the approval of Director General of Foreign Trade.
Yours faithfully,
(A. K.
Sinha)
Dy.
Director General of Foreign Trade