VKGUY Scheme - Applicability of notification No. 41/2005-Cus to the goods imported against the credit Scrips issued under para 3.8.6 of Foreign Trade Policy (FTP) (2008-09) under Vishesh Krishi Gram Udyog Yojana (VKGUY) scheme.

Document Text

Circular No. 8/2009-Customs F.No.605/55/2008-DBK Government of India Ministry of Finance Department of Revenue New Delhi, the 16th February, 2009. Subject: Applicability of notification No 41/2005-Cus to the goods imported against the credit Scrips issued under para 3.8.6 of Foreign Trade Policy (FTP) (2008-09) under Vishesh Krishi Gram Udyog Yojana (VKGUY) scheme – Reg Reference is invited to para 3.8.6 of the Foreign Trade Policy (FTP) wherein Status Holders have been incentivized with duty credit scrips equal to 10% of the FOB value of agricultural exports(including benefits entitled under para 3.8.2 of the FTP). These Duty Credit Scrips can be used to import specified capital goods/equipment meant for development of agricultural infrastructure. In this connection, Directorate General of Foreign Trade had requested that a circular may be issued to implement the aforesaid provision. 2. The matter has been examined by the Board. In this regard, I am directed to say that Notification No.41/2005-Cus exempts all goods including capital goods which are freely importable, when imported into India against the duty credit certificate issued under Vishesh Krishi Gram Udyog Yojan (VKGUY) in accordance with para 3.8 of FTP. Since para 3.8 of FTP covers para 3.8.6 also, it is clarified that, the present Notification No 41/2005-Cus would cover imports under para 3.8.2 and para 3.8.6 of FTP. 3. It may be mentioned that in terms of provisions of the FTP, the duty credit scrips under para 3.8.2 are issued to all exporters against the export of notified items. These scrips can be used for the import of inputs or goods including capital goods which are freely importable. Further, the scrips are freely transferrable. However, the duty credit scrip under para 3.8.6 of FTP can be issued only to status holders against the agricultural exports and can be used only for the clearance of capital goods and equipments as specified in the said para. Further, these duty credit scrips are subject to actual user condition and are not transferable. 4. In view of the above differences in the scrips issued under para 3.8.2 and para 3.8.6 of FTP, it is desirable that the scrips are properly verified before allowing import of permitted goods. It is also suggested that, due care may be taken in granting the exemption to only those goods as permitted under the respective policy paragraphs. Care may also be taken in permitting transferability only to those scrips which are issued under Para 3.8.2 of FTP. 5. These instructions may be brought to the notice of the field officers by issuing suitable Standing orders/instructions. Difficulties faced, if any in the implementation of the Circular may please be brought to the notice of the Board at an early date. (P.V.K. Rajasekhar) OSD (Drawback)

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