DFIA – transfer of duty free materials – DGFT clarification
As per para 4.5 of the HOP of the FTP, “Transfer of any duty free material imported or procured against Advance Authorisation from one unit of company to another for manufacturing purpose shall be done with prior intimation to jurisdictional Excise Authorities with a clear understanding that no benefit of CENVAT shall be claimed on such transferred inputs. However, such transfers shall not be allowed to units located in areas covered by Central Excise Notification No. 39/2003 and other area based exemptionsl.”
Representations have been received from trade and industry to clarify whether the restriction is applicable for DFIAs with ‘No BG/LUT ' endorsement or endorsement of transferability.
DGFT now clarifies that the restrictions on such transfer is limited to advance authorization and DFIA Scheme issued and operated under Actual User condition. Once transferability is endorsed on the DFIA , transfer of the imported/domestically procured input(s) against such DFIA shall not be covered by the restrictive clause.
DGFT POLICY CIRCULAR No. 31 (RE-2008)/2004-2009 Dated: September 8, 2008