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Nasscom Representation to DGFT on Implementing GAICT for Re-Export of SCOMET items

On 6th February, Nasscom submitted a representation to DGFT, requesting DGFT to issue relevant guidelines at the earliest so that the industry can take benefit of the ‘Global Authorisation for Intra-Company Transfer (GAICT) of SCOMET Items/Software/Technology’, and ensure compliance with all the necessary requirements under Public Notice 20/2015-20 (Public Notice 20). In the absence of necessary guidelines, the industry is unable to apply for GAICT, causing companies to lose out on many short-lease projects and opportunities.

 

Additionally, we requested that DGFT provide an off-line mechanism for an intermediate period till the online facility for GAICT is operationalised.

 

Context/Background of GAICT

On July 24, 2019 the DGFT vide Public Notice 20 inserted Para 2.79F to the Handbook of Procedures of the Foreign Trade Policy (FTP) 2015-20 which introduced the GAICT scheme.

Under the GAICT scheme, eligible exporters do not require pre-export authorisation for re-export of imported SCOMET items, software and technology (excluding items under SCOMET categories 0, 1B, 1C, 3A401, 5 and 6).

The conditions (‘Scope and Eligibility’) to avail of the benefits under GAICT scheme are:

  • The re-export must involve an intra-company transfer from an Indian subsidiary (applicant exporter) to its foreign parent company and/or to the subsidiaries of the foreign parent company for re-export of imported SCOMET items from India; and the following conditions must also be fulfilled:
  • The item to be re-exported under the GAICT scheme has been imported under a licence exception in the country of the parent company abroad or from subsidiaries of the foreign company abroad;
  • The item to be re-exported is based on a Master Service Agreement/Contract between the parent company and the Indian subsidiary for carrying out certain services including design/encryption/research/development/delivery/validation/testing. An important condition here is that the item should not have undergone any change in functionality and classification as a result of the service carried out by the Indian exporter;
  • The item must be intended to be re-exported to the foreign parent company and/or its subsidiaries;
  • The applicant exporter must furnish a declaration that the re-exported item would be used for the purposes for which it is intended by the foreign parent company and/or its subsidiaries;
  • A certified/approved Internal Compliance Programme (ICP), or demonstration of compliance to the ICP of the foreign company (by the applicant exporter);
  • Applicant exporter to agree to on-site inspection, if required by DGFT or authorised government representatives;
  • Grant of GAICT to the exporter as per the procedure mentioned in Public Notice 20.

Public Notice 20 also outlines the procedure for grant of GAICT along with post reporting and record keeping obligations.

While Public Notice 20 has been issued with immediate effect, the relevant application form for GAICT and the relevant documents needed to give effect to the Public Notice (including Aryat Niryat Forms (ANF) 2O (b), ANF 2O (c) and End Use Certificate Proforma Appendix 2S (iv)) have not yet been notified.

 

In case, you have any additional comments/inputs on this matter, please write to dagarwal@nasscom.in.

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