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b) Exemption from mandatory QCOs shall be specifically endorsed in the Advance authorisation, upon the request
of the authorisation holder. Imports under Authorisation without specific endorsement of exemption shall be made
in accordance with mandatory QCOs.

c) Any unutilised imports or the products manufactured with inputs imported without compliance to the mandatory
QCOs, shall not be transferred to DTA, even after regularisation of default in fulfilment of export obligation. For the
purpose of this para, unutilised imports means imported inputs (without compliance of mandatory QCOs) which
have not been accounted for, as per SION/Ad-hoc Norms, in the product exported under the same authorisation.
d) The unutilised imports shall be regularised as follows:
(i) The unutilised material shall be destroyed in the presence of jurisdictional GST/Customs authorities who shall
certify the destruction of the goods or same may be re-exported;

(ii) In addition, such unutilised imports, irrespective of origin of goods, shall be liable to payment of effective duty
on MFN basis along with interest on the exempted material, to Customs Authorities plus composition fee of
an amount equivalent to 10% of the CIF value of unutilised imported inputs to DGFT. Proof thereof shall be
submitted to the RA concerned before grant of EODC.
e) The exemption from QCO will be available for physical exports only and such exemption will not be allowed for
deemed exports for Advance Authorisation.

f) The facility of clubbing under para 4.36 of Handbook of Procedures (HBP), 2023 shall not be available.
g) The Export Obligation period for such authorizations shall be as per para 4.40 of Handbook of Procedures. However,
EO period is restricted to 180 days from the date of clearance of import consignment in respect of QCO exemption for
textile
h) Import of Inputs without compliance to the mandatory QCOs under DFIA scheme is not allowed.

(i) This exemption is further subject to para 2.03 (c) of FTP.
ii) For EOUs

(i) Exemption from applicability of mandatory QCOs issued under the BIS Act, 2016, shall be provided to EOU on
import of inputs which are required for export production. No DTA clearance of such inputs or goods manufactured
made out of such inputs, are allowed. An undertaking to that effect will be submitted to the Customs authorities by
the EOU at the time of importation and a copy of the same shall also be submitted to the Development Commissioner
concerned. The exemption from QCO will be available for physical exports only and such exemption will not be allowed
for deemed exports. This exemption is further subject to para 2.03 (c) of FTP.
iii) For SEZ

(i) Exemption from applicability of mandatory QCOs issued under the BIS Act, 2016, shall be provided to SEZ on import
of inputs which are required for export production. No Dl'A clearance of such inputs or goods manufactured made
out of such inputs, are allowed. An undertaking to that effect will be submitted to the concerned Development
Commissioner of the SEZ by the SEZ Unit at the time of importation. The exemption from QCO will be available for
physical exports only. This exemption is further subject to para 2.03 (c) of FTP".

3. The following sub-para (c) is appended to the existing para 2.03 of FTP 2023:
"(c) The list of Ministries/Departments whose notifications on mandatory QCOs, that arc exempted by the DGFT
for goods to be utilised/consumed in manufacture of export products, arc given in Appendix-2Y of FTP 2023?.

12 CRAFTCIL • March 2024