Landed unit cost for importer must not below specified MIP: DGFT

New Delhi, Feb 11 (KNN) The landed unit cost of an importer must not be below the specified Minimum Import Price (MIP) and the post February 5, 2016 the USD unit value specified in the DGFT notification will be restricted from entry into India, said the Directorate General of Foreign Trade (DGFT).

After receiving queries on Minimum Import Price (MIP) on Iron and Steel, DGFT has come out with clarifications. On February 5, 2016, DGFT had issued a notification on imposition of MIP on certain iron and steel products.

Q. Whether imports below the USD unit value specified in the notification are restricted for imports?

Ans. Imports affected on after February 5, 2016 below the USD unit value specified in the notification will be restricted from entry into India.

Q. What must be the landed unit cost of the importer?

Ans. Landed unit cost must not be below the specified MIP.

Q. Whether it is possible to import items covered under Notification No. 38 (2015-2020) having a unit CIF import price below the MIP by paying custom duty on the MIP unit value specified in the notification?

Ans. No. It is not possible to import items covered under Notification No 38 (2015-2020) whose unit CIF import price is below the stipulated MIP by paying custom duty on the MIP specified in the Notification. The imported items must have a unit CIF value equal or above the MIP.

Q. Import shipments are in Transit and shipped (B/L Date) before February 5, 2016 from China. As the notification facilitates only LC holders, what happens to importers doing business on DA/TT basis?

Ans. Imports are governed by provisions as in Para 2.17 of Handbook of Procedure (2015-2020) which inter-alia lays down that the date of reckoning of “import” is decided with reference to date of shipment/ dispatch of goods from supplying country as given in Para 9.11 of Handbook of Procedure; and not the date of arrival of goods at an Indian port. Accordingly, imports effected on February 5, 2016 and thereafter will be governed by the Notification No. 38 dated February 5, 2016.

Q. Whether imports on letter of credit issued on February 5, 2016 will be permitted for clearance?

Ans. No. In the Notification it is clearly mentioned that import shipments under the letter of credit entered into before the date of the notification shall be exempted from the MIP condition subject to Para 1.05 (b) of the FTP 2015-2020.

Q. Will the letter of credit be required to be registered? If so, with which authority?

Ans. As per Para 1.05 (b) of FTP 2015-2020, for operationalizing irrevocable letter of credit, the applicant/ importer will have to register the Letter of Credit with jurisdictional Regional Authority (RA) against computerized receipt, within 15 days of the imposition of any such restriction of regulation. (KNN Bureau)