Subject:
Regularisation of VABAL in case of
shortfall in value or quantity or both.
Sir,
Attention is invited to Para 128 B(ii) of the Handbook of Procedures for
the year 1992-97 (RE-96) under which if the shortfall in terms of quantity or
value or both is not more than 15% of the total export obligation imposed, a
request for pro-rata reduction in terms of quantity and/or value may be
considered by the Regional Licensing Authority for the purpose of regularisation
without converting the Value Based Advance Licence (VABAL) into Quantity Based
Advance Licence (QBAL).
2.
References
have been received from Regional Licensing Authorities and representations have
also been received from the exporters seeking clarification as to how pro-rata
reduction is to be granted.
3.
After careful consideration of the references in this regard it has been
decided by the Policy Review Committee meeting that basically where the
shortfall is less than 15% then pro-rata reduction is to be provided without
converting VABAL into QBAL. Policy Review Committee Meeting has decided that
these cases may be regularized by adopting the following principles:-
(i)
In respect of a Value Based Advance licence percentage of fulfillment of
export obligation may be seen both in terms of quantity as well as in terms of
value and the lesser of these two may be taken into account for working out the
proportionate import.
(ii)
CIF value may be reduced corresponding to the fulfillment of export
obligation as indicated in paragraph 3(i) above i.e. percentage of fulfillment
in terms of quantity and percentage in terms of fulfillment of value, whichever
is less. In case CIF value utilised is less or equivalent to CIF value so
arrived at, the case may be closed.
(iii)
In case the CIF value utilised is more than the CIF value
reduced as per paragraph 3(ii) above, then the
total duty benefit availed under this VABAL license may be calculated.
Since this total duty benefit availed is corresponding to the total CIF
value of imports under this license, duty benefit entitlement may be calculated
with reference to the reduced CIF value calculated as per paragraph 3(ii) above.
(iv)
The applicant may be asked to pay balance Customs duty i.e. total duty
benefit availed – total duty benefit entitlement as calculated as per
Paragraph 3(iii) above, along with 24% interest and SIL.
(v)
In respect of sensitive items the import will be allowed strictly as per
the quantity of exports and on the balance import the duty along with the
interest and SIL will have to be paid.
(vi)
However, these guidelines will not be applicable to the cases which have
already been adjudicated upon and these cases will not be re-opened.
4.
These
principles are illustrated by the following examples:-
Case No. 1:-
Shortfall in Quantity
|
|
Quantity |
Value |
|
E.O. fixed |
10,000
Kgs. |
US $ 10500/- |
|
E.O. fulfilled |
9,OOO
Kgs. |
US $ 10790/- |
|
% of EO fulfilled |
More than 85% |
+ 100% |
|
% of shortfall |
Less than 15% |
NIL |
|
Case No. 2:- Shortfall
in Value |
||
|
|
Quantity |
Value |
|
E.O. fixed |
10,270
Kgs. |
US $ 71500 |
|
E.O. fulfilled |
10,500
Kgs. |
US $ 70890 |
|
% of EO fulfilled |
+100% |
More than 85% |
|
% of shortfall |
Nil |
Less than 15% |
5.
Case No. 2 :
In this case export obligation has been fulfilled in terms of quantity
but value-wise there is a shortfall. CIF
value will be reduced corresponding to this proportionate and excess Customs
Duty will be calculated corresponding to this reduced CIF value. Applicant will
be required to pay Customs Duty
(total duty availed – total duty entitlement as calculated above) and interest
along with SIL.