Duty Free Replenishment Certificate - DFRC



Duty Free Replenishment Certificate :

Duty Free Replenishment Certificate is issued to a merchant-exporter or manufacturer-exporter for the import of inputs used in the manufacture of goods without payment of Basic Customs Duty and Special Additional Duty. However, such inputs shall be subject to the payment of Additional Customs Duty equal to the Excise Duty at the time of import.


(i) Duty Free Replenishment Certificate shall be issued only in respect of export products covered under the SIONs as notified by DGFT. However, DFRC shall not be issued in respect of SIONs which are subject to actual user condition or where the input is allowed with prior import condition or where the norms allow import of acetic anhydride, ephedrine and pseudo ephedrine.


(ii) Duty Free Replenishment Certificate shall be issued for import of inputs, as per SION, having same quality, technical characteristics and specifications as those used in the end product and as indicated in the shipping bills. The validity of such licences shall be 18 months. DFRC and/or the material imported against it shall be freely transferable.


(iii) The Duty Free Replenishment Certificate shall be subject to a minimum value addition of 33%.


(iv) The export products, which are eligible for modified VAT, shall be eligible for CENVAT credit. However, non excisable, non dutiable or non centrally vatable products, shall be eligible for drawback at the time of exports in lieu of additional customs duty to be paid at the time of imports under the scheme.


(v) The exporter shall be entitled for drawback benefits in respect of any of the duty paid materials, whether imported or indigenous, used in the export product as per the drawback rate fixed by Directorate of Drawback (Ministry of Finance). The drawback shall however be restricted to the duty paid materials not covered under STON.


(vi) Duty Free Replenishment Certificate may be issued in respect of exports for which payments are received in non-convertible currency. Such exports shall, however be subject to value addition.


The exporter exporting under DFRC shall be required to give a declaration in the EP copy of the shipping Bill indicating the serial number and product group of SION of the export product. Export shipments under DFRC can be effected from any port covered under the Scheme. The DFRC and the material imported against it shall be freely transferable. The transfer of DFRC shall however be for import at the port specified in the DFRC, which shall be the port from where exports have been made. However for import from a port other than the port of export, TRA shall be issued by the customs authority at the port of export to the customs authority at the port of import.


An application for grant or DFRC may be made to the licensing authority concerned in the form alongwith the prescribed documents. Such application may be made by the Registered Office / Head Of rice or a branch Office or manufacturing unit of the eligible exporter. Further, the application shall be filed only after realisation of export proceeds. However, in case of exports against irrevocable L / C application may be filed after exports. The CIF value or DFRC shall be arrived at after discounting 33% frorn the FOB value or exports. The FOB value shall be calculated on the basis of the bank realisation certificate.


The application for DFRC shall be filed within 180 days frorn the date of realisation reckoned from the last date or realisation in respect or shipment for which DFRC is being claimed. However, in case of exports against irrevocable L / C, it shall be filed within 180 days from the date of exports reckoned from the last date of exports in respect of shipments for which DFRC is being claimed. In respect of exports against advance payment, DFRC shall be filed within 180 days from the date of exports against advance payment.


The applicant shall file one application relating to one export product from one port of export. Where the same export product has been exported from different ports or registration, the exporter shall file more than one application for the same export product group.



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