Implementation of Duty Free Import Scheme (DFIS)

No. CLE-HO/POL/DFIS/2016-17

March 20th, 2016

Dear Member,
Sub: Implementation of Duty Free Import Scheme (DFIS) – Comprehensive guidelines – 2016-2017 – reg.
Members are kindly aware that the regulations governing implementation of DFIS were notified through Customs Notification (Tariff) No. 12/2012 dated 17th March 2012, as amended from time to time.

   The Comprehensive DFIS Guidelines along with the details of the certification fee is enclosed herewith for member’s ready reference.
A.   Brief introduction on the DFIS scheme.
B.   3% DFIS for exporters of Leather Garments – list of eligible inputs/embellishments notified for import, eligibility conditions, operative guidelines including issue of Export Performance Certificate and Import Certificate and payment of service charges for availing DFIS.
C.   3% DFIS for manufacturer-exporters of Leather footwear or synthetic footwear and leather products – separate list of eligible inputs/embellishments for import for product segments namely Leather Goods, Footwear, Footwear Components, Leather Gloves and Saddlery & Harness items, eligibility conditions, operative guidelines including issue of Export Performance Certificate and Import Certificate and payment of service charges for availing DFIS.
 D.  Application form for issue of Export Performance Certificate (EPC) for Leather Garments exporters enclosed at Annexure – I
 E.   Application form for issue of Import Certificate (IC) for Leather Garments exporters enclosed at Annexure – II
F.  Specimen of Affidavit at Annexure – III to be submitted by exporters of Leather Garments for import of lining and interlining materials as per serial No. 259 of Customs Notification (Tariff) no. 12/2012 dated 17.3.2012, as amended from time to time.
 G. Application form for issue of Export Performance Certificate (EPC) for Footwear/ Footwear Components/Leather Goods/ Leather Gloves and Saddlery & Harness segments enclosed at Annexure – IV.
  H.  Application form for issue of Import Certificate (IC) Footwear/ Footwear Components/Leather Goods/ Leather Gloves and Saddlery & Harness segments enclosed at Annexure – V.
  Members may please note all the above guidelines with regard to implementation of DFIS scheme during 2016-17.

1) Service charges:
The following “Service charges” will be applicable for issuance of Export Performance Certificates (EPCs) and Import Certificates (I/Cs) for the year 2016-17, as in last year.

One time payment option: The Service Charges for issuance of Export Performance Certificate (EPC) will be @ 0.04% of FOB value, subject to a minimum of Rs. 4,000/- for members opting one- time payment for issue of Export Performance Certificate. Service Tax will be levied at 14% and Swachh Bharat Cess 5%. The service charge may be rounded off in tens, for example if the service charge payment is Rs.4002/-, it may be rounded off to Rs.4010/- plus 14.5% Service Tax towards issue of Export Performance Certificate (decimals to be rounded off, for example if the service tax value is Rs.495.64, it may be rounded off to Rs.496/-).

Every time payment Option: The Service charges for issuance of Import Certificate (I/C) will be @ 2% of CIF value, subject to minimum charges of Rs.200/- payable per IC. Service Tax will be levied at 14% and Swachh Bharat Cess 5%. The service charge may be rounded off in tens, for example if the service charge payment is Rs.202/-, it may be rounded off to Rs.210/- plus 14.5% Service Tax towards issue of Import Certificate (decimals to be rounded off, for example if the service tax value is Rs.295.64, it may be rounded off to Rs.296/-).

However, as announced in Union-Budget 2016-17, Krishi Kalyan Cess of 0.5% may also be charged on service tax w.e.f. June 1, 2016. Accordingly the total service tax w.e.f. 1.6.2016 will be 15%.

Members may kindly note the procedures/guidelines mentioned in this Comprehensive Circular and accordingly avail the benefits of DFIS, with effect from April 1, 2016.

With regards,
R Ramesh Kumar, IAS
Executive Director