1.    As you are aware para 7.36A of Public Notice No. 10/97 (P.N.) 97-2002 dt. 21.5.97 provides that the amount of Credit entitlement rate, in respect of export products whose DEPB rate 15% or more, shall not exceed 50% of the PMV of the goods.

2.    Object of Limiting The amount Of Credit Based On The Present Market Value (PMV).

        The condition of restricting the credit-amount under DEPB Scheme to 50% of the PMV was prescribed to prevent the exporters from obtaining excessive amount of credit by inflating the FOB price of the export product. It is stated that the FOB value may be higher, as per the contract between the exporter and foreign buyer, (depending on various factors), but the "Present Market Value" of the goods is an index of their local (wholesale/ retail) price inclusive of excise duty, Sales tax and other local taxes plus cost of transportation. Accordingly the amount of credit is to be restricted with reference to the domestic price of the product, and not with reference to the FOB price declared on the GR From/ Shipping Bill.

3.    Determination of PMV

        (i)    Manufactures Exporters

(a)    As regards Manufacturers- Exporters who export under AR4 form, where the AR4 value is declared as the PMV, the same shall be accepted.

(b)    Where the Manufacturer Exporters declares PMV which is higher than the AR4 price, (as PMV is inclusive of  transpiration costs and domestic duties and taxes), the higher PMV declared may be accepted upto 150% of AR4 value (exclusive of excise duty). Market enquiry may be caused only if PMV is more than 150% of AR4 price, and exporter does not agree to lower the PMV below the 150% mark.

(c)    Where the Maximum Retail Price (MRP) is required to printer on the products as per the Weights & Measures Act, the MRP indicated on the products may also be accepted as PMV.

(d)    For the products for which manufacturers have a Printed Price list, or a Catalogue indicating the local price of the products, the price indicated on the price list/ catalogue shall be accepted as PMV.

(a)    In the case of export goods purchased from the open market, or from a Manufacturer, the PMV will accepted on the basis of Guidelines in paras (a) to (b) of para 3(1) ibid.

(b)    In case the PMV of the goods can not be determined as per the para above, the exporters may be required to furnish the sale invoice of the Authorised Dealer, or any other evidence to determine the correctness of the PMV declared by the exporters. In such cases evidence of local prices of similar goods may also be accepted as PMV.

6.    Verification of PMV / FOB value through market enquiries should be specifically assigned to the SIIB and not the assessing officer. The enquiry must be completed and final view taken in 30 days.

7.    In all case where no Show Cause Notice challenging the declared PMV is issued within 30 days from the date of export, the PMV declared shall be deemed to have been accepted.

8.    Under no circumstances will the shipments be stopped/ held back for the above purposes.