On 9 December 2020, NASSCOM submitted a representation to Directorate General of Foreign Trade (DGFT) requesting for the establishment of a separate re-validation procedure for export authorisation of SCOMET items (intangible technology and electronic hardware).
The current re-validation scheme is aimed at addressing the schemes/authorisations issued under Chapter 4 (Advance Authorisation, Duty Free Import Authorisation) and Chapter 5 (Export Promotion Capital Goods Scheme). These schemes are in the nature of prescribing export performance obligations over authorisation holders. However, grant of authorisation to export SCOMET items is based on a different set of considerations. Companies that obtain an export authorisation under SCOMET provisions, are under an obligation to track the end-use and end-user of the exports they would carry out. They do not have an export performance obligation to fulfil as part of the export authorisation. A SCOMET authorisation represents an approval or permission by the DGFT for a class of goods/technologies.
Accordingly, the representation asks for the establishment of a separate re-validation procedure for export authorisation of SCOMET items (intangible technology and electronic hardware), as follows:
For revalidation of SCOMET authorisation for intangible technology
Automatic re-validation scheme: DGFT may consider revalidating the authorisations for a period of 3 years with simple application for the license holders having the following characteristics:
- Exports are made to their group companies (intra company transfers)
- There is no change in the existing license details, i.e., description of goods/service, end-use and end-user
- Units have a status-holder certificate
Conditional revalidation: DGFT may consider revalidating the authorisations for a period of 3 years routing through the Inter-Ministerial Working Group (IMWG) approval process, for license holders having the following characteristics:
- Exports are made to their group companies (intra company transfers)
- There is change in the end-user, but there no change in the goods/service as well as end-use
- Units have a status holder certificate
For all other cases, revalidation may be through the currently existing revalidation process.
For revalidation of SCOMET authorisation for electronic hardware
Automatic re-validation scheme: DGFT may consider revalidating the authorisations for a period of 3 years with simple application for the license holders having the following characteristics:
- Re-Exports are made to their group companies (intra company transfers) and there is no change in the existing license details, i.e., description of goods, end-use and end-user
- Exports for UN funded projects/Government procurements
- Exports within WA member countries
Conditional revalidation: DGFT may consider revalidating the authorisations for a period of 3 years routing through the IMWG approval process, for license holders having the following characteristics:
- Exports to their group companies (stock and sell)
- Exports for defective replacement (only for the original buyer)
- Original authorisation was issued for all categories of temporary transfers (Demo, Testing, Repair, Calibration, Certification, Training etc.) if that has not been utilized by the exporter for a particular period and particular quantity.
For all other cases, revalidation may be through the currently existing revalidation process.
For the implementation of new procedures, the representation recommends notification of a revised form ANF 4D, requiring information as necessary for a SCOMET re-validation, along with a simplified procedure for online submission of application and fees.
In case of additional comments/inputs on this matter, please write to garima@nasscom.in.
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