Policy Circular No. 76 (RE-2008)/2004-2009 Dated: 30th March 2009
Subject:- Guidelines for execution of BG/LUT with Regional Authorities for filing application under DEPB scheme and Incentive schemes of Chapter 3 of FTP without the requirement of Bank Realisation Certificate - regarding.

    Attention is invited to DGFT Notification No. 88 and Public Notice No. 151, both dated 26.02.2009, wherein the procedure for availing the benefit of DEPB and the Chapter 3 Incentive schemes (Having transferability facility) have been relaxed to the extent that at the time of filing the application for the respective schemes, Bank Realisation Certificate (BRC) shall not be mandatory. An exporter has the option either to file the application without BRC or with BRC.

2. This facility shall be available for application filed w.e.f 1.4.2009. However for the complete applications already received by the RAs prior to 1.4.2009 and which are at various stages of processing, the application shall be dealt as per the provisions prior to 1.4.2009.

3. In case the applicant opts for the benefit under the scheme without realisation at the time of filing the application, BRC shall be submitted by the applicant within 12 months from the date issuance of the Scrip(s). Applicant shall also be required to send a 'Statement of export proceeds realisation' shipping bill wise, to the Regional Authority concerned against each scrip, in original, every 3 months beginning from the date of issuance of individual scrip.

4. In case extension in time period of realisation has been allowed by RBI or the authorized dealer(s) as per the guidelines laid by RBI, the exporter shall immediately furnish a copy of the extension letter to the concerned Regional Authority (RA).

5. After issuance of the scrip based on Shipping Bill(s), Bank Guarantee (BG)/ Legal undertaking (LUT) and other document(s) as prescribed in the policy and the Handbook, Regional authority shall continuously monitor each individual case for submission of BRC within the stipulated time period. In case the BRC is not furnished or the export proceeds in Free Foreign Exchange have not been realized either in full or in part within the stipulated time period, RA shall initiate action forthwith for recovery of the amount as stated in the policy and the procedure laid thereunder.

6. In case the actual FOB realisation is more than the FOB endorsed in the Shipping Bill (on which duty credit has been allowed), supplementary claim shall be required to be filed within 6 months of realisation as per the existing application format for DEPB application along with the applicable application fee, other documents and declaration stated in the application format / policy. However in case the original application was filed along with the manual copies of original shipping bills to RA, shipping bill copies shall not be required to be submitted again and only the reference original RA file No. and DEPB number/ transferable scrip number (under chapter 3) along with its date of issuance shall be required to be mentioned at the time of filing the request for supplementary claim.

7. BG / LUT shall be filed in such cases as per the criterion laid down in paragraph 2.20 of HBP v.1. The RA shall ensure that at the time of filing of application, the validity of BG/LUT shall be at least 24 months from the date of export (Let Export Order Date). In case of a number of S/Bs filed against one application either for DEPB or for any specific freely transferable Incentive Schemes under Chapter 3 of FTP, 24 months time period shall be from the LEO date of latest S/Bs. Revolving BG/LUT, if any filed, shall be limited to a specific scheme, which means that for an exporter filing application for different schemes under the aforesaid laid down guidelines, shall be required to file separate BG / LUT. Further, BG / LUT filed in one RA shall not be utilized for BG/LUT to be filed in another RA for different application.

8. RA concerned shall maintain scheme - wise, exporter - wise details of BG/LUT including its amount and the date of expiry in all such cases for regular monitoring and follow up action. The record shall also indicate the expiry of a maximum time period of 12 months from the date of issuance of each Scrip(s). Once BRC or the documents evidencing realisation of export proceeds, as required under the policy is furnished, the RA shall enter the same in the data base and the record so maintained scheme - wise, exporter - wise. Once all the required BRC (s) or the documentary evidence to that effect, as allowed under the policy, are furnished against each scrip so issued, RA concerned shall examine the same and if found in order, shall close the case and intimate the applicant in case of LUT and / or return the BG, as the case may be.

9. In case the scrip is issued without BRC or the documents evidencing realisation of export proceeds, as required under the policy or the procedure laid thereunder, RA shall endorse the following clause in the “condition sheet” attached to the scrip so issued:-

“This scrip has been issued without submission of Bank realisation certificate. The applicant shall furnish BRC or other documents evidencing realisation of export proceeds (as allowed under the FTP and the procedure laid thereunder) within 12 months from the date of issuance of the Scrip. Applicant shall also be required to send a 'Statement of export proceeds realisation' shipping bill wise, to the Regional Authority concerned against each scrip, in original, every 3 months beginning from the date of issuance of individual scrip. In case of extension in time period of realisation, allowed by RBI or the authorized dealers, the exporter shall furnish a copy of the extension letter to the concerned Regional Authority (RA) immediately. In case of default, BG / LUT shall be enforced as per the terms and conditions stated therein.”

10. Party shall retain the “condition sheet” till the compliance of the aforesaid conditions(s).

11. Any difficulty in operation of the aforesaid provisions shall be brought to the notice of this Directorate immediately.

This issues with the approval of Competent Authority.

Sd/-
(C. Gangadharan)
DY. DIRECTOR GENERAL OF FOREIGN TRADE

(Issued from F.No. 01/94/180/ 982 /AM09/PC-4)

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