Policy Circular No. 21/ 2009-14 Dated 12.01.2009
Eligibility of cotton bathmats/rugs for grant of duty credit scrip under VKGUY/FPS
of FTP
Hand-made carpets and other textile floor coverings, covered
under Chapter 57 of ITC (HS) Classification Book, are eligible for duty credit
scrip under Focus Product Scheme at the rate of 5% for exports made with effect
from 23-2-2009. Before 23-2-2009, these were eligible for duty credit scrip
under VKGUY/FPS at different rates.
2. The Trade and Industry have represented that cotton bathmats/rugs are covered
under ITC (HS) Codes 5703 and 5705, but exports of cotton bathmats/rugs which
are described in the shipping document as only cotton bathmats/rugs or
machine-made or machine-tufted cotton bathmats/rugs, are being denied the
benefit under Chapter 3 of the Foreign Trade Policy by the RAs on the ground
that the policy allows the benefit only to ‘hand-made’ category. In this regard,
the Trade and Industry have represented that though for tufting, a motor
operated tufting machine (similar to table-top type sewing machine) is being
used, yet the entire process of making such tufted bathmats/rugs requires
elaborate manual handling. In this regard, the Trade and Industry have
elaborated that marking of the outlines on the base fabric as per the design and
colour combination is done manually, the base fabric/canvas is cut manually to
give it the desired shape;; filling of different colours with the needle of the
sewing machine is done by moving the base fabric/canvas by hands; after
finishing the tufting, uneven threads are cut by hands with the help of a
scissor and sheering and embossing is also done by hand with the help a scissor
to produce a finished product. Thus, the entire process requires elaborate
manual handling by a worker and this motor operated tufting machine is not the
kind which can produce the tufted bath mats/rugs automatically without any
manual handling. The Trade and Industry have, therefore, contended that such
tufted cotton bathmats/rugs, even if described on the shipping documents as
simply cotton bathmats/rugs or machine made or machine tufted cotton
bathmats/rugs, are covered by the ‘hand-made’ category, and thus, should be
entitled to benefits under VKGUY/FPS, as the case may be.
3. The matter has been examined in detail, and it is clarified that, in the case
of cotton bathmats/rugs covered under ITC (HS) Codes 5703 or 5705, if the
description of the export product on the export document is only cotton
bathmats/rugs or machine-made cotton bathmats/rugs or machine-tufted cotton
bathmats/rugs, the exports of the same should be considered for the benefit of
duty credit scrip at the rate of 5% under the Focus Product Scheme for exports
made from 23.2.2009 onwards, and earlier under VKGUY/FPS, at the applicable
rates, after obtaining a self declaration from the exporter as under:
“It is certified that cotton bathmats/rugs, described in the Shipping Bill
No.--------dated -------(to write all Shipping Bill Nos., if more than one), as
“cotton bathmats/rugs” or “machine-made cotton bathmats/rugs” or “machine-tufted
cotton bathmats/rugs”(to write whichever is applicable), and against which the
benefit under FPS or VKGUY (to write whichever is applicable) under ITC (HS)
Code 5703 or 5705 (to write whichever is applicable) is being claimed under the
DGFT File No.-------------- , have been tufted by a worker by using a table-top
mounted sewing machine, and it is also certified that all other processes like
cutting of the base fabric as per the design, sheering, embossing etc. have been
done manually”.
4. However, from the date of issuance of this Policy Circular, the exporters are
required to describe the product in the shipping bill as tufted cotton
bathmats/rugs and also to give a self declaration as under:
“It is certified that tufted cotton bathmats/rugs, exported under the Shipping
Bill No.--------dated -------(to write all Shipping Bill Nos., if more than
one), and against which the benefit under Focus Product Scheme under ITC (HS)
Code 5703 or 5705 (to write whichever is applicable) is being claimed under the
DGFT File No.-------------- , have been tufted by a worker by using a table-top
mounted sewing machine, and it is also certified that all other processes like
cutting of the base fabric as per the design, sheering, embossing etc. have been
done manually”.
5. This issues with the approval of DGFT.Sd/-
[Satyan Sharda]
Joint Director General of Foreign Trade
[Issued from F.No. 01/91/180/1452/AM09/PC3]
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