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Contributed on December 17, 2020

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NASSCOM representation to DGFT on establishing an independent revalidation scheme for the authorisation issued under SCOMET

Blog: NASSCOM Official Blog

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:

1. Exports are made to their group companies (intra company transfers)
2. There is no change in the existing license details, i.e., description of goods/service, end-use and end-user
3. 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:

1. Exports are made to their group companies (intra company transfers)
2. There is change in the end-user, but there no change in the goods/service as well as end-use
3. 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:

2. 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
3. Exports for UN funded projects/Government procurements
4. 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:

1. Exports to their group companies (stock and sell)
2. Exports for defective replacement (only for the original buyer)
3. 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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