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215 G 1/78—2

VALIDITY PERIOD Ol' LICENCE

MINISTRY OF COMMERCE

(Import Trade Control)

New Delhi, the- 21st January, 1978

Subject: Schedule of conditions relating to (lie issue o£ licences for imports under the UK/India Sectoral Gram, 1977.

Public Notice No. 7-ITC(PN)/78/Filc No. IPC/39/16/ 77.—The terms and conditions governing the issuance of import licences under the UK/India Sectoral Grant, 1977 as given in Appendix to this Public Notice arc notified for information.

Appendix

Licensing conditions for the UK/India Sectoral Grant

1977, dated 27-1-1977.

I. GENERAL

1. The import licence will bear the superscription "UK/ India Sectoral Grant 1977". In addition to the licence number and the licence code with, "R/KS" or "S/KS", as suffixes, it will bear the allocation number, Known ns the Identification Suffix the symbol "SEC" indicating the Sectoral Grant; follow- ed by u letter '"A" which stands for the Power Sector for which the Grant is intended, followed by a number indicating the year in which the allocation is made, ;ind followed by an allocation number:—

for example

SEC/A/72/14(GOI)

i.e. Sectoral Grant/Powcr/Year/Allocntion number.

(b) In the case of allocations made with the prior approval of the British Government, the symbol "(GOO" will not appear in the identification sulfix, as is evident from the following example :

"SEC/A/72/14.

(c) One allocation—Multiple lieences.--Whcn there is more than one import licence apninst an nllocation, the licensing authorities will ensure, at the time of iswue of the import licence thai each licence pertaining to ;in allocation, will bear a further identification mark, for example :

(i) SEC/A/72/14(G01)/l (first licence)

(ii) SEC/A/72/1.4(GOI)/2 (second licence)

i.e. Sectoral Grant/Power/Vcar/Allocation number/Serial

number of licence.

(d) One licence—Multiple contracts,—When there ii moie than one purchase order/contract against an import licence, it is the responsibility of the licensee to ensure that each purchase order/contract under that import licence is given n further identification mark i.e. (I), (2) etc. In brackets after the identification mark for the licence.

for example : for contracts against SEC/A/72/14(G01)/l(T)

the first import licence issued against the SF.C/A[12/ 14(GOI) /I (2) allocation.

i,e, Sectoral Grant/Powcr/Ycar/Allocalion number/Serial number of import licence (serial number of the Purcbuse order).

Similarly for the contracts against the second import licence issued against an allocation, it will be—

SEC/A/72/14(.GOI)/2(l) SEC/A/72/14(GOl)/2(2)

Note:—The identification suffixes indicated above or any where in these conditions are only illustrative to enable the licensing authority and (he licensee to understand the procerdnre and are not to be used. The actual identification suffix will be indicated by the Ministry ol" Finance, Dcpanmenr of Economic Affairs, in respect of each, and every allocation to be inscribed by the licensing authority on the import licence at the time of its issue.

2. The import licence will be issued on C1F bayis with an iniliul validity period of 4 months for contracting and 12 months for completing the shipments. Where however the deliveries arc expected to materialise over a longer period Ihe initial validity of the licence could be 18 months.

Within a fortnight of the receipt of the import licence, the importer should furnish to the Ministry of Finance, Depart- ment of Economic Affairs, (WE II Section), New Delhi, a photostat copy of the import licence. A copy of this should also be sent to the Controller of Aid Accounts and Audit (CAA&A), Ministry of Finance, Department of Economic Affairs, UCO Bank Building, Parliament Street, New Delhi.

ORDERING

3. Firm orders on C1F or C&F basis must be placed on the UK suppliers within a period of four (4) months from ihe date of issue of the import, licence. Firm orders means pur- chase orders placed by the Indian licensee on the U.K. sup- plier duly supported by confirmation from the latter, or purchase contract duly signed by both the Indian importer and U.K.. suppliers. The prices should generally be firm for I lie duration of the contract.

Whenever insurance is taken out on au Indian Company,

the premium should be paid in Indiu in Indian Rupees.

4. Extensions in ordering period.—If firm orders cannot be placed within the prescribed period of 4 months, the import licence should be submitted to the licence issuing authority immediately, indicating reasons- for delay in placement of firm orders and seeking extension in the period of ordering as considered necessary. Such requests will be considered by the licensing authorities who may grant, extension upfo a maximum, period of four months. If, however, extension is sought for a period exceeding 8 months commencing from the date of issue ol the import licence, such proposals- will invariably be referred by the licensing authorities to the De- partment of Economic Affairs (WE II Section) Ministry of Finance, North Block, New Delhi, who will communicate the orders.

5. Mode of Payment.—For the purpose of payments under UK/India Sectoral Grant 1977, the imports have been divided in the following two categories :

(i) (a) Items which are financed from the working capi- tal of first users e.g. materials, components, spares and other consumable ytores acquired other than for the purpose of increasing production capacity of the first user; (First User is the firm or or- ganisation (other than trading organisations) which fin.'t acquires the floods and services to be provi- ded from out of the Grant. The firm may for instance, be a manufacturer of plant equipment and components for the electricity supply industry or an enterprise of the electricity supply indus- try itself).

(b) Items which are addition¹) to a first users fixed capital e.g. plant or other goods and services acquired for the purpose of increasing the pro- duction capacity of a first user, costing less than £500,000 in foreign exchange.

(c) All types of items required by the ultimate users

like the Electricity Boards.

(ii) Items which are additions to a first users' fixed capi- tal, involving sterling expenditure of £500,000 or above.

Payments to the suppliers for items covered under para liXa), (b) & (c) can be arranged through normal banking channel by establishing letters or credit, but a special autho- risation for doing so should be obtained from the Controller of Aid Accounts & Audit, Ministry of Finance, Department of Economic Affairs, UCO Bank Buildine, Parliament Street, New Delhi, in the manner detailed in section HI(A) below.

fur iiL'ins i/iiveied under jtcm (ji) above, prior approval of the Government of India and the Government of the U.K. v< necessary and the procedure detailed in Section IIKB) should be followed.

It should be noted lhat unless ordering is complete within the initial period of four months or the extended period, and the special authorisation (as indicated in the above paragraph) is obtained, the authorised dealers in foreign exchange will not permit establishment of letters of credit.

6. Indian Agent's Commission,—Any payment towards the Indian Agents' Commission should be made in Indian rupees to the Agent in India. Such payments will however, form part of the import licence and will, therefore, be charged to it.

7. Orders should be placed on cash basis and nil the pay- ments must be completed within the validity period of the import licence. Individual payments must be arranficd on shipment of goods. No. Credit facility of any kind will be allowed.

II. SPECIAL POINTS TO BE INCORPORATED IN THE ORDERS/CONTRACTS OR OTHERWISE KEPT IN VIEW.

8. While placing orders/contracts which muyt be placed only on the suppliers in the Uniled Kingdom (which expres- sion in this connection, includes tliC Channel Islands and the Isle of Man), the licensee must ensure by a provision in the orders/contracts that the goods purchnscd are, or will be wholly or mainly produced or manufactured in the United Kingdom. When the contract also provides for works and services in connection with the purchase of mich goods, it must similarly be ensured by a suitable provision therein, that such works and services arc, or will be provided by per- sons ordinarily residents or carrying on business in the United Kingdom. +

9. Non-UK content criteria,—(a) Import licences under the UK/India Sectoral Grant 1977 will normally be valid only foi" goody and/or materials procured and produced or manu- factured in the United Kingdom.

(b) The Indian Importer is advised in his own interest to ascertain from the UK suppliers, beforehand, whether the proposed imports contain any non-UK element, and if so, the percentage thereof. Under no circumstances should be enter into a firm commitment or contract with a UK supplier without specifically ascertaining this point,

(c) When on such an enquiry it is revealed that the goods proposed to be imported have some non-UK element, the matter must be brought to the notice of the Ministry of Finance, Department of Economic Affairs, WE II Section, New Delhi, for confirmation whether the importer should, proceed with the prospective UK supplier. In this connection it may be mentioned that in exceptional cases non-UK ele- ment upto a limit of 20 per cent of the FOB value of (he goods in a single contract may be agreed to be financed under th" UK/India Sectoral Grant 1977, provided the non- UK content forms an integral part of the finished products; and the non-UK origin material cannot be used independently of (he finished products, proposed to be imported. For this purpose the Indian importer should apply for a specific ap- proval enclosing a copy of the Contract Certificate, duly signed by the UK supplier, in the prescirbed form [Annexurc II or Annexure 1I(B)—as is appropriate] to the Department of Economic Affairs (WE II Section), Ministry of Finance, North Block, New Delhi.

10. The documentation requirements mentioned in Section III and V below and the payment procedure laid down in Section IV below should be kept in view and should be appropriately incorporated in the contract.

ACCEPTANCE AND AMENDMENTS THERETO

III. NOTIFICATION OF CONTRACTS, CONTRACT (A) In respect of imports covered by para 5(i) above

11. Within a fortnight of placing of orders, the licensee should forward three copies of the contract or notification of contract (in the form attached as Annexure 1) accompanied by two copies of the contract certificate [in the form attached as Annexure IT or Annexulre II(B) as is appropriate] duly signed by the UK supplier, to Controller of Aid Accounts & Audit in the Ministry of Finance, Department of Economic Affairs, New Delhi.

A copy of the notification of contract (Annexure I) may also be endorsed to Ministry of Finance, Department of Eco- nomic Affairs, WE II Section. New Delhi.

12. While forwarding [he above documents to the CAA&A. New Delhi (as stated in para 11 .-ibovc), it must be ensured by the licensee that complete number and date of the import licence and the title of the Grant (UK/India Sectoral Granl 1977) arc clearly noted on the documents. The licensee must also ensure that the Identification Suffix of Ihe import license has been indicated on all the documents viz. the for- warding letter; the contract; the contract notification; the contract certificate, etc.

Illustration : If, for example, the identification suffix. "SEC/ A/75/l2(GOl)" has been allotted by the Ministry of Finance. Department of Economic Affairs, New Delhi, for a certain allocation made during the year 1975, the documents under the first import licence and the second import licence will bear the identification suffix as under :

(i) First Import Licence— SEC/A/75/l2(GOI)/l

First contract under it. SEC/A/75/12(GOI)/1(l) Second contract under it. SEC/A/75/l2(GOI)/l(2) and

so on

(ii) Second imporllicence SEC/A/75/l2(GOl)/2

First contract under it. SEC/A/75/L2(G01)/2(l) Second contract under it. SEC/A/75/l2(OOl)/2(2) and so

The licensee, while forwarding the contract documents to the CAA&A, New Delhi, must (jive the relevant details of the number of contracts placed under the relevant import licence. The importer will be solily responsible for the accuracy of these dctails.

13. If at any time, a contract is amended or if liability thereunder is to be incurred for a greater ur lesser amount than the amount specified in the contract certificate, the licensee should within a fortnight of the date of the amend- ment of the contract forward the supplementary or revised documents including copies of amendments to contracts and the revised contract certificate, to CAA&A in order lo enable him to notify the same to the UK Government.

14. If. the contract is with the Indian Agent of the UK supplier, it should indicate the name of the UK supplier to whom payment is to be made for the sterling portion of the contract which alone will qualify for payment under the Grant. Copies of such contracts (of contracts pluoed hy Indian Agent with the UK supplier, if there arc such separate contracts! should be sent as prescribed above.

(H) Jn respect of imports covered by para 5(ii) above,

15. Within a fortnight of placement of ihc contract, the licensee should forward four copies of ihc contract or notifi- cation of contraat (in the form attached as Annexure 1) accompanied by five copies of the contract certificate [in the form attached as Annexure II or Annexure 1T(B)1 (as may be appropriate) duly signed by the UK supplier to CAA&A, New Delhi. A copy of Annexure 1 should also be endorsed to Ministry of Finance, Department of Economic Affairs, (WES II Section), New Delhi.

Note : As no L/C can be established or payments made to the suppliers unless the contract is duly approved bv the UK Government, it is imperative tor the licensee to ensure that copies of contract/notification of contract along with con- tract certificate, duly signed by the UK supplier are forwarded to CAA&A at the earliest.

16. While forwarding the above documents (para 15 above), it must be ensured by the licensee lhat the number and date of the import licence, the title of the Grant arc clearly noted on the documents. The licensee must also give the identifi- cation suffix in each contract against the import licence (please see illustration under para 12 above),

17. The CAA&A will arrange through the Chief Account- ing Officer, High Commission of India. London (CAO, London) to file a set of the documents to the UK Government for obtaining their approval and acceptance of the payments under the contract being made out of ihc UK Grant. As soon as possible, after the decision of Ihe UK Government is known, the CAO London will inform tho UK. supplier as also the licensee direct, under advice to the Ministrv of Finance (CAA&A).

IK. If, at the lime, a contract (being a contract in res- pect of which acceptance of the UK Government has been obtained or is pending) is amended, ot if liability is to be incur fed thereunder lor a greater/lesser amount than the amount specified in the contract certificate, the licensee should forward the supplementary or revised documents, copies of amendments to the contract and the revised contract certifi- cate to CAA&A, in order to enable him to notify the same to the UK Government for obtaining their acceptance. As soon as acceptance of the amendment to the contract is receiv- ed from the UK Government the CAO London will inform the licensee and the Ministry of Finance (CAA&A) in the same manner as for the original contract,

19, If the contract is with the Indian Agent of the UK

Supplier, ptira 14 above should also be complied with.

IV. PAYMENT TO THH UK. SUPPLIERS—LETTER OF CREDIT PROCEDURE

20(n) The licensee should, while forwarding the documents vide Section III(A). or afier the receipt of intimation regarding approval of the contract by the UK Government (vide para 17), apply to CAA&A. New Delhi for a letter of authorisation to any authorised bank dealing in foreign exchange for open- ing a letter of credit in favour of the UK supplier with one of the correspondent banks in the UK. The request for the letter of authorisation should be in the form set out at Annexure III, accompanied by a photostat copy of the import licence for verification of the exchange rale.

(b) In the case of contracts covered by Section III(B) the importer should also enclose the Bank Guarantee (in the form given in Annexure IV) obtained from the authorised dealer in foreign exchange, The B.ink Guarantee should be for an amount representing the rupee equivalent of the sterling amount for which the Letter of Authority/Letter of Credit is required to be issued plus interest and other charges as men- tioned in Annexure TV. The rate of conversion shall be nt the exchange rate notified by the Department of Revenue and Banking and prevailing on the date of issue of the import licence as per para 2 of the Public Notice No. 78-ITCfPN)/ 74 dated 6-6-74 issued by the CC1&E. This rale is meant only for the purpose of arriving at the value of the Bank Guarantee to be furnished by the Licensee. For the purpose of making rupee deposits into Government account towards Ihe cost of imports, the rupee equivalent will have to be worked out in accordance with ihe method prescribed in Public Notice No. S-ITC(PN)/76 dated 17-1-76 or as may be notified by Government from time to lime in future.

Tvlote : No Bank Guarantee is required from public sector projects. In such cases the letters of credit will be opened through any branch of the State B.ink of India (including its subsidiaries) or any Branch of any of the Nationalised Banks.

21. If the application is found to be in order, the CAA&A in the Ministry of Finance. Department of Economic Affairs. New Delhi will issue a letter of authorisation for Ihe requisite amount to the Indian Exchange Bank concerned. In either of the cases whether falling under Section 1IKA) and III(B) the letter of Authorisation will refer to the identification suffix of the contract/purchase order, which should figure in the letter of credit to be opened and on all the documents to be furnished under the letter of credit. In the case of con- tracts covered by Section 11KB) above, the Contract Approval number of the UK Ciovernment will also be incorporated in the Letter of Authority and Letter of Credit, The CAA&A will also advise the UK Bank and the CAO London suitably about the Letter of Authority issued. The advise /o the UK Bank will, however, be sent to 'be Indian Exchange Bank concerned, nlong with a copy of Ihe letter of authorisation, who would, in turn transmit it to the UK Bank while opening the letter of credit.

22. The letter of credit should be opened within a period of one month from the date of issue jf the letter of authorisa- tion, failing which the authorisation will lapse,

23. The letter of credit should detail Ihe conditions to which the license is subject ; should provide for payment to the UK supplier on submission of all the documents detailed in Section V be.low; should contain adequate instructions re- i/arding the despatch of documents after payment and should be opened subject to the condition that the Correspondnig Bank in UK would, after making payments to the hene- ficaries initially out of their own lunds, obtain reimbursement from the concerned Bank in India in case covered by Section III(A) or from the Stale Bank of India London through the CAO London [in cases covered by Section J11(B)J. The Indian Exchange Bank's instructions regarding the opening of letter of credit must accord completely with the authorisation issued by the Ministry of Finance. There should be no dis- crepancies in any respect. The letter of credit should contain the superscription "UK/India Sectoral Grant 1977", the I/L No. and date, the Identification Suffix and where necessary the UK Government's contract approval number.

24. "While opening letter of credit, the Authorised Ex- change Bank in India should, on behalf of the importer, take care to incorporate necessary conditions in the letter of credit and ensure that the documentation requirements are noted and complied with by the UK supplier.

25. If a letter of authorisation already issued is to be amended on account of enhancement in the import licence value, the request of the importer should be accompanied by the import licence or photostat copy thereof, showing the ex- change rate applicable for the amount of increase in import licence value.

V. DOCUMENTATIONS

26. The importer is responsible to see that the UK supplier completes and submits and documnets detail-d below to the UK Bank at the time of claiming payment for the goods supplied :

(i) The original invoice, with four photo copies or copies by any other process, [The invoice should show the name and address of the importer, quantity and detailed description of each item supplied, the basis of delivery (C&F or C1F1 nnd the sterling cost of any Incidental services including delivery services or marine or transportation insurance].

(ii) One copy (or photostat) of ocean of charter Bill of Lading or airway Bill or parcel post receipt. (The Bill of Lading should either indicate or be accom- panied by the carriers statement tf charges in what- ever currency it w pnid).

(iii) Four copies of the payment certificates in the form given as Annexure V fnot required in respect of con- tracts for which contract certificate (chemicals) in the form given as Annexure TT(B) has been provided]. For this purpose five blank forms of the payment certificate in the prescribed form should be attached to the letter of credit for completion by the supplier at the time of obtaining payment.

(iv) Three copies of the contract certificate prescribed in

Annexure II Or Annexure 1KB).

Each of the above documents must show fhe Grant title, the identification suffix, the details of import licence, and the particulars of the letter of credit authorisation issued by the Ministry of Finance. (The Bill of lading may not cany the details of import licence, if it is not found possible to mention these details by the clearing agents).

27. After tho payment is made to the UK supplier, the UK Correspondent Bank will send by fast air mail the origi- nal negotiable set of documets to Ihe Indian Bunk concerned.

28. (a) For cases, falling under Section ni(A), the Tndian Bank will reimburse the UK Bank by remittance, the pay- ments made 6y it to the UK suppliers along with the bank charges. The recovery of correspondnig rupee equivalent by the Indian Bank from the improter for such foreign exchange remittances will be as per the arrangements agreed to between them. The UK Bank should also send a non-negotiable copy of the completed payment certificate of CAA&A, New Delhi.

For cases, falling under Section IIIfB), the Tndian Bank, would on receipt of documents, remit the Bank charges to the UK Bank and recover the same from the importer.

(b) The UK Bank will, in cases covered under Section III(B), simultaneously claim reimbursement from the CAO London and for this purpose will submit all the documents. Tho CAO London will arrange payments to the UK Bank through the State Bank of Tndia London,

\ i. INDIAN HANK'S RESPONSIBILITY TO UN \DL1 1HE GOVERNMENT OF INDIA 10 OBTAIN REIMBURSEMENT UNDER THE UK GRANT/FOR RUPEE DEPOSITS.

(a) In cases coming under Section II1(A)

29. After reimbursing the UK Bank of the sterling payments made by it to the UK suppliers along with the DanK cliargcs Lsec para 2K(a)J the .uiuiun bunk should, within 7 days, send the necessary documents to CAA&A, New Delhi to enable the Govt. of India to obtain reimburse- ment under the UK Gram, The documents to be furnished are :—

(i) Contract certificate in the form set out in the Annexure 11 or Annexure 1MB), as is appropriate, duly signed by the UK suppliers and a copy ot the relevant letter of credit.

(li) Payment certificate in the form given in anne-

xure V duly signed by the UK supplier.

(iii) The invoice and Bill of Lading as mentioned in Section V. Where there is more than one payment to be made to the UK supplier under a contract, the contract certificate and a copy of the letter of credit need be supplied only for the tirst pay- ment,, bor the subsequent invoices need to be sent to the CAA&A, New Delhi, but the identification suffix in the relevant contract certificate and the letter of credit should be quoted.

(b) Jn the cases coming under Section U1(B)

30. Within seven (7) days of the receipt of the adice of payment alonu with ji shipping documents from the UK correspondent Bank, the Indian Exchange Birrrli concerned shall collect from the importer the cost of imports in rupees at the "composite rate of exchange" [see para 20(b) abovej plus interest charges at the rate notified in Public Notice No. 46-ITCIPN)/76 dated 16-6-1976, for the period fiom the date of payment to the UK suppliers by the UK Bank to the date of deposit of the rupee equivalent into the Government account (both days inclusive). The instruc- tions in this regard contained in Reserve Bank, of India, Bombay, AD Circular No. 22 of 18-6-1977, should be strictly adhered to.

31. Deposit of Rupee Equivalent,—The amount refer- jed to above should be deposited by the Indian Bank to the credit of the Government of India in the Reserve Bunk of India, New Delhi or the State Bank of India, Tls Hazari Branch, Delhi or if this is not feasible, should be remitted by means of a Demand Draft drawn on and in favour of the State Bank of India, Tis Hazari Branch, Delhi. Rupee deposit should be made in the revised form of the treasury Challan, Published as annexure to Public Notice Mo. 74-lTC(PN)/74 dated 31-5-1974 as amended vide Public Notice No. 103-irC(PN)/76 dated 12-10-1976. Thereafter the treasury challan evidencing the deposit should be sent by Registered Post to the CAA&A, New Delhi indicating references to and enclosed copies ot the invoice shipping documents and the Authorisation of that Depart- ment ta which the transaction relates.

The Indian Bank concerned shall also arrange to deposit in the same manner such additional amounts on account of service charges as may be demanded by the Government of India within 7 (seven) days after such demand.

The licensee should also fill in, in duplicate, the Form "S", incorporated as Annexure If to Public Notice No. 184- ITC(PN)/68. dated 30th August 1968 and present the same to their bank while arnmtiing for rupee deposits in accor- dance with the procedure prescribed In the said Public- Notice.

32. Head of Account for Rupee Deposit.—The amounts including interest charges to be deposited to the Credit of Government of Jndia shall be creditable under the follow- ing Head of Account :

"K—DEPOSITS AND ADVANCFS—843 CIVIL DEPOSITS—DEPOSITS FOR PURCHASE KTC. ABROAD-DEPOS1TS UNDER UK/INDIA SECTORAL GRANT 1977".

Accounts Officer and the Controller of Aid Accounts and Audit, New Delhi shall be shown as the Accounts Officer who will adjust these credits.

33. Release of Bank Guarantee.—After the riMtitationn in terms of the Bank Guarantee and the Letter of Credit Authorisation issued by the Ministry of Finance arc fulfil- led, the Indian Bank concerned can apply to the CAA&A. New DeLhi for the release of the Bank. Guarantee. The application sliould be made by the Indian Bant concerned uwt by the importer) and should be in the form laid down as Annexure VI.

VII. REPORT ON THE UTILISATION OF THE IMPORT

LICENCE

34. Reporting,—A quarterly report, in the form attached M ANNEXURE VII showing the utilisation status of the licence should be furnished on the Uth of month followiiiK the quarter to which it relates to the Ministry of Finance, Department of Economic Affairs (WE Jl Section), New Delhi with a copy to the Controller of Aid Accounts & Audit, Ministry of Finance, Department of Economic Affairs, UCO Bank Building, New Delhi.

VIII. IVflSCELLANEOUS

35. Refunds from UK Suppliers.—If any money is received by the licensee from the UK suppliers or a Guarantor (insurance company etc.) as a refund or in settlement ot insurance claim or otherwise, such umounts should be refunded by the supplier to the concerned correspondent bant: in the U.K. (from which the payment was initially made to the U.K. supplier) with the instructions to refund the amount immediately, in turn, to CAO I^ondon for crediting to the Grant Account, After the Grant Account is so credited, an equivalent amount in rupees will be arran- ged to be refunded to the importer by the Ministry of Fi- nance, upon receipt of a claim therefore from the importer. If any refund is received after the closure of the loan, the same will have to be made by the supplier direct to the im- porter.

36. Reporting of Refunds.-—As and when any _such refund is received, a report thereof should bo made to the Ministry of Finance with a copy to the CAA&A in the form set out on Annexure VIIL

NOTIFICATION OF SPECIAL CONDITIONS PROVI-

SIONS TO SUPPLIER

37. The licensee should apprise the Supplier of any spe- cial provisions in ihe import license which may affect the suppliers in carrying out the transaction.

DISPUTES

38. It should be understood that the Government of India will not undertake any responsibility for disputes, if any, that may arise between hte licensee and th" suppliers.

FUTURE INSTRUCTIONS

39. The licensee shall promptly comply with any direc- tions, instructions or orders issued by the Government regarding any and all matters arising from or pertaininc to the import licence and for meeting all obligations under this grant Agreement.

BREACH OR VIOLATION

40. Any breach or violation of the conditions setforth in the above clauses will result in appropriate action under the imports and Exports (Control) Act 1947 and the orders issued thereunder.

IX. LIST OF ANNEXURES

J. Annexure I Notification of Contract.

2. Annexure IT Contract Certificate.

3. Annexure II(B) Contract Certificate (Chemicals).

4. Annexure ITT Form of application for letter ol

Credit Authorisation.

5. Annexure IV Form of Bank Guarantee.

6. Annexure V Payment Certificate.

7. Annexure VI Form of application for the relcaw

of Bank Guarantee.

R. Annexure VII Form for reporting Ordering anc Utilisation of the Import Licence

9, Annexure VIII Form of reporting Refunds.

ANNEXURE 1

UNITED KINGDOM/INDIA SECTORAL GRANT 1977

NOTIFICATION OF CONTRACT

To:

The Crown Agents for Oversea Governments and Administration 4 Millbank, London SWL, Notification of Contract No Identification Suffix, The following are details of a contract under which it is proposed that payments shall be made in accordance with the terms and con- ditions of the above grant.

1. Name and address of

United Kingdom Contractor:

2. Date of Contract: 3. Name of Indian Purchaser: 4. Short description of goods

and/or works or services:

5. Value of Contract : £ 6. Terms of Payment :

Signed on behalf of the Government of India

Date

ANNEXURE II

UNITED KINGDOM/INDTA SECTORAL GRANT 1977

CONTRACT CERTIFICATE

Particulars of Contract

1. Date of Contract

2. a. Contract No

b. Identification Suffix

3. Description of goods or services to be supplied to the purchaser

(If a number of items are to be supplied, a detailed list should bo appended to this certificate)

4. Total contract price payable by purchaser (state CIF, C & F or FOB) £

IF GOODS ARE TO BE SUPPLIED THE FOLLOWING SCETIONS MUST BE COMPLETED (If the contractor is exporting agent only, tho information requested should be obtained from manufacturer) 5. Description of goods to bo supplied Price £ UK TARIFF/TRADE CODE NO, to Purchaser

6. Estimated % of the FOB value of the goods not originating in tho United Kingdom, but purchased by the Contractor directly from abroad, i.e. % of imported raw material or components used in manufacture a. % FOB value . .. -. b. Description of items and brief specifications

7. If any raw material or components used originated from abroad, eg copper, asbestos, cotton, wood pulp, etc. but have been purchased in the United Kingdom by the contractor for this contract, specify:— a. % FOB value b. Description of items and brief specifications

IF SERVICES ARE TO BE SUPPLIED THE FOLLOWING SECTION SHOULD ALSO BE COMPLETED

8. State the estimated value of any work to be done or services performed in the purchaser's country by

a. Your firm (site engineers, charges, etc.)

b. Local contractor

9. Qualifying remarks as necessary in respect of paragraphs 6, 7 or 8 above

10. I hereby declare that I arr employed in the United Kingdom by the Contractor named below and have the authority to sign this certificate, I hereby undertake that in performance of the contract no goods or services which are not of United Kingdom origin will be supplied by the Contractor other than those specified in paragraphs 6, 7, 8 and 9 above.

Signed Position held Name and Address of Contractor

Date Note: For the purpose of this declaration the United Kingdom includes the Channel Islands and (he Isle of Man.

215 GI/77—3

"

PAYMENTS FOR OFFICIAL USE ONLY Name or number of Project

.—

PA

Date Amount No Initials

Amount committed Date of Entry Acceptance

Date Initials

ANNEXURE H(B)

UNITED KINGDOM/INDIA SECTORAL GRANT 1977 CONTRACT CERTIFICATE FOR CHEMICALS AND ALLIED PRODUTS ONLY

Import Licence No Date

1. Date of Contract Contract No Identification Suffix

2. Description of Product(s) to be supplied £Pricc ' UK Tariff Classification No. Is the product of UK origin to Purchaser (Note A)

(Note B) (See note C)

State 'Yes' or 'No'

3. Total (Estimated) Contract Price payable by Purchaser in Sterling— £

4. (Declaration ) I hereby declare that I am employed in the United Kingdom by the contractor named below and have the authority to sign this certificate, and that the above information is correct.

Date

Signed Position held Name and address of contractor

N O T ES

A. This form is only to be used for chemical and allied products, most of which are covered by the appropriate sub-headings of Chapters 15, 25, 26-36, and 37—40 of the UK TarilT.

B. SEE:—

(i) HM Customs and Excise Tariff HMSO (li) Classification of Chemicals in Brussels Nomenclature HMSO C. (i) A product is regarded as of 'UK origin¹ if made either wholly from indigenous UK materials OR according to the appro- priate FFTA qualifying process using imported materials wholly or in part. (ii) The FTA qualifying processes are set out in Schedule I of the 'EFTA compendium for the Use of Exporters', HMSO.

(iii) For the purposes of this declaration it is to be emphasised that the 'Alternative Percentage criterion' DOES NOT APPLY, (iv) The words "Area Origin" where they appear in the above Schedule must be taken to mean "UK Origin" only, (v) For the purposes of this declaration, the "Basic Materials List" (Schedule III of the EFTA Compendium) does not apply, (vi) Tf a qualifying process is not listed for the materials in question, advice should be sought from the Crown agents for Oversea Governments and Administrations, 4 Millbank, London SWL. d. For the purpose of this declaration the United Kingdom includes the Channel Islands and the Isle of Man.

ANNEXURE III

FROM OF APPLICATION FOR LETTER OF CREDIT AUTHORISATION

Identification Suffix

To

Th- Controller of Aid Accounts & Audit, Economic Aid Accounts Section, Ministry of Finance, Department of Economic Affairs, United Commercial Bank Building, Parliament Street, New Delhi.

Subject:—Tmport of — — —

from U.K. under UK/India Sectoral Grant 1977.

Sir,

In connection with the import of — from UK against the above UK/India Sectoral Grant 1977, we furnish the following particulars to cnableyou to issue us authorisation for opening a Letter of Credit through our bankers on the U.K. Bank designated by you :—

(a) Particulars of Import licence.

.Value (Rs.) Date uplo Full No. & Date which valid —

(b) Sterling value of licence.

(Cilcul Ued at the rale of exchange indicated in the import licence by the 1 icensing authorities),

(c) Progressive Sterling value of the orders already placed for which L/As have been obtained (A Statement of LA nos & Sterling amount to be enclosed).

(if) Sterling value of the orders placed for which authorisation is required specifying the name and address of the UK supplier/ suppliers and thsamount/s of authorisation required separately against eachsupplier (copy of orders placed and UK suppliers' acceptance thereof to be attached).

(e) Name of UK Correspondent flank on whom the Letter of Credit is to be established.

(f) Name of the Indian Bank which has furnished the BankOuarantce and which will open the Letter of Credit in cases where sec- tion III (B) of this Public Notice is applicable.

(g) Mams of the Indian Bank which will open the Letter of Credit in cases where no Bank Guarantee is required.

The Bank Guarantee furnished by — and which has been duly adjudicated by the Collector

(Name of Bank)

in accordance with the provisions of section 31 of the Stamped Act, 1899, is attached.

Yours faithfully, (Signature of Licensee & full address).

Note:—ftem(f)is not applicable lo cases falling under Sectionlll(A)

ANNEXURE IV

FORM OF BANK GUARANTEE

To

The President of India, Through Secretary to the Govt. of India, Ministry of Finance, Department of Economic Affairs, New Delhi.

Sir,

In consideration ofthe President of India hereinafter referred to as'the Government' having agree to arrange for payment in foreign currency ofthe price of goods to be imported by

1 .* (i)

individual/partners

(ii) working under the name (iii)

and style of M/s ——_ name(s) & address(s).

••Messrs

ii company having ils registered office at

in the State of

hereinafter referred to as the Importers'under Import Licence No dated

granted for

, Rupees, we, hereby guarantee that we shall arrange deposit to the credit of the Government in the Reserve Bank of India, New Delhi/State Bank of India, Tis Haziui Branch, Delhi or by means of Demand Draft Drawn on and in favour of State Bank of India, Tis Hazari Branch, Delhi (for Credit to the Central Government Account) to be forwarded to the said Tis Hazari Branch ;—

(i) Withinsevendaysofthercceiptofadviceofpaymentwiihshippingdocuments,fromtheUKBaiiks,ofrupee equivalent of the invoiced price representing the sterling disbursements made by the UK Banks, under the letter of credit authorisation issued by Ministry of Finance, at the composite rate of exchange prescribed for this purpose by the C.C.I. & E., vide Public Notice (No. l5-lTC(PN)/72 dated 28-1-72 read with Public Notice No.l08-ITC(PN)/72 dated 21-7-72 and) N0.8-ITC (PN)/76 dated 17-1-76 or as notified from time to time through subsequent Public Notice or by the Reserve Bank of India through Exchange Control Circulars to the Authorised Dealors in foreign exchange, alongwith interest thereon at 9 per cent per annum for the first 30 days and at 15 % for the period in excess of 30 days from the date of payment to UK suppliers to the date of deposit of rupee equivalent and UK bank charges (both dates inclusive), as notified in Public Notice No, 46-ITC(PN)/76 dated 16-6-76.

(ii) Within seven days of the demand by the Government of such additional amounl as may be demanded by the Government as being due on account of service charges.

2. We undertake to pay to the Government on demand and without demurrang such sum not exceeding rupees (plus interest and service charges as aforesaid) as may be demanded by the Government in the event ofthe importers failing or neglecting to make any ofthe above mentioned said payments and the decision ofthe Government as to such failure or njglectonths piirt of Importers and as to the amount payable to the Government by us hereunder shall be final and binding on us.

3. We—————— agree and undertake not to release shippingdocuments to the Importers until after the rupee equivalent as aforesaid and the other dues, if ny, is d^.ninded by Government are deposited tot hecrcditoftheGovernmenl.

4. We, ——agree and undertake not to revoke this Guarantee duringits currency except with the previous concern of the Government in writing.

5. The gurantee herein containedshall not beaffected by any change in thcconstilution of the Importers or of our Bank.

6. The Government shall have the fullest liberty without affecting this guarantee to vary any ofthe terms of the Import licence de- tailed above or to ex tend the time for payment by the Importers from time to time or to postpone for any time and from time to time any ofthepowersexcrcisebytheGovernmcnt of theliberty with reference to the amount ofaforesaid or any reason of any such variation or extension of lime being given to the Importers oi'any forebearancc, act or omission on the part ofthe Government of any indulgence by the Government lo t he importer or by any of the matters or things whatsoever which under the law relating to sureties shall but for this provision have theell'ecl of so relcasingus —Bank from our such liability.

Our liability under this bond/guarantee is restricted to Rs,- ———• (plus interest and service change es aforesaid) and

(month) — — — 1 9 7 7. We also under- it will remain in force till t h e— ** day of take to make such additional deposits as may be necessary in terms of C.C.l&E's PublicNotice No. 15-ITC(PN)/72 dated 28-1-72 read with Public Notice No. 108-lTC(PN)/72 dated 21 st J uly, 1972 or as notified from t ime to time. Unless claim under the bond/guarantee are made in writing within six months of this date and unless a suit or action to enforce these claims is commenced within another six months thereafter i.e. upto — —-all Government's rights under this bond/gunrunlce shall be forfeited si'.i we shall bt rolicvcd and discharged from all liability thereunder.

Yours faithfully,

Signatureof the Authorised Officer of the Bank &Bank's full address Place —

Date _ _—

(The Bank Guarantee is to be executed on a non-judicial stamp paper, the value of the FtHmp being adjudicated by the Collector in accordance with the provisions of Section 31 of t he Ind ian Stamp Act, 1899).

• Strikeout whichisnotapplicable.

** This date shall be arrived at by adding one month t o the date by which all payments are expected to be finalised.

ANNEXUREV

Identification Suffix

UNITED KINGDOM/INDIA SECTORALGRANT 1977

PAYMENT CERTIFICATE

I hereby certify that

(i) the payments referred to in the invoices listed below, which or copies of which accompany this payment certificate have been made of fall due and are due to be made in respect of Contract No dated

between the contractor named below and

(purchaser)....".

and are in accordance with the particulars of this contract notified in the contract certificate signed on behalf of the said contractor on

Contractor's Invoice No. Date Amount £ Short description of goods works and/or services

(ii) The amounts specified in paragraph i, do not include any additional foreign content to that declared in Paragraph J, 6, or 7 of the contract certificate.

(ill) 1 have the authority to sign this certificate on behalf of the Contractor named below.

Signed Position held For and on'behalf of Name and Address of Contractor

Date

Note:—For the purpose of this declaration the United Kingdom Includes the Channel Islands and the Isle of Man.

ANNEXURE VI

FORM OF APPLICATION FOR RELEASE OF BANK GUARANTEE

Identification Suffix

To

The Controller of Aid Accounts & Audit, Ministry of Finance, Department of Economic Affairs, United Commercial Bank Building, Parliament Street, New Delhi.

Sir,

We are furnishing below detailed information on the rupee deposit made by us in discharged of our obligations under for an amount of Rs with the Bank Guarantee No dated request that the same may be released and returned to us.

1. The name and full address of the importer/licensee on whose behalf the

bank guarantee was furnished.

2. The Import Licence No. Date value and brief description of the com-

modities allowed for import thereunder.

3. Particulars of the authorisation^) for opening Letters of Credit obtained

from the Ministry of Finance. (a) Letter No. and Date. (b) Amount of authorisation. (c) U.K. Grant.

4. Particulars of Imports and rupee deposits made (to be given separately

for each Letter of Credit Authorisation). (a) Particulars of Letters of Credits opened (No;, date value and the

supplier's name).

(b) Invoice No. and date relative to each Letter of Credit. (c) Amount of Invoice (net in sterling). (d) Amount of rupee deposit. (e) Relative challan No. and date and tho name of Treasury/Bank. (f) Tf by demand draft, No. and date of the demand draft and the No. and date of the Letter with which the draft was sent to the Slate Bank of India, Delhi.

5. Amount utilised and balance unutilised (sterling) in each Letter of Credit

Authorisation. II. Wo certify that :

(1) T h at balance amount of £ available in the authorisation(s) given by the Ministry of Finance has not been utilised/will not be utilised.

°R

No lettor of credit was opened under the authorisations) and the authorisation(s) lapsed.

OR

The letter of credit was opened against the authorisation letter(s) expired unutilised and

(2) Our obligations tinder the back guarantee in question have been duly discharged.

i n. Wo request that tho bank guarantee may please be released and returned to us for cancellation.

Yours faithfully,

Authorised Agent for and on behalf of the Bank

•Whichever is applicable,

ANNEXURE VII

(FORM OF UTILISATION REPORT)

UNTTED KINGDOM/INDIA SECTORAL GRANT 1977

Identification Suffix (i) report to be sent for each quarter i.e. April--June

July—September October—December January—March

by the 15th of the month following the quarter),

(ii) report to be furnished separately for each licence (both in Rs, and £s.).

1. Name of the importer (Licensoo).

2. Complete No. and Date of Import Licence.

3. Value of the import licence, 4. Date and value of the firm orders placed against the above licence

and phasing of the balance ordering,

5. Whether the contract documents have been sent to CAA &A in accordance with the relevant stipulation in the licensing conditions (No. and date of communication to be quoted).

5. Details of the value of Letters of credit opened in favour of tho

UK suppliers.

7. Phasing of payments :

(a) Actual payments made :

(i) October 77~December 77. (ii) January 78 -March 78.

(and so on)

(b) Estimate of payments to be made :

(i) April 1978—June 1978. (ii) July 1978—September 1978. (iii) October 1978—December 1978. (iv) January 1979—March 1979.

(and so on)

(i) Indicate specifically the portion of the licence not covered by firm

orders and is thus surrendered.

,.Sign"turei'.:-...."j..i'.j..viii;*.

Address

215 G 1/77—4

ANNEXURE VIII

Report showing details of refunds received from supplier/Shippers/insurers (towards settlement of claims for short landings, damages etc.) in respect of imports from the U.K. under UK/India Sectoral Grant 1977. Identification Suffix No

(only for claims settled in £ sterling)

1. Name of importing firm. 2. Particulars of U.K. Grant. 3. No. and date of the import licence. 4. Value of import licence. 5. Amount of refund received. 6. Nature of refund (give brief details). 7. Reference to the relative documents under which payment was made initially to the UK suppliers (indicate name of Indian Bank and reference to their letter No. and Date forwarding the documents to the Ministry of Finance).

8. Whether or not refunds received are to be utilised for replacement of

goods, if not confirm that amount has been actually received and encashed into rupees.

9. Remarks.

Signature of the authorised office of the importing

firm.

[Issued from File No. IPCy39/16/77]

K. V. SESHADRI, Chief Controller of Imports and Exports.

FUMTEJ) BY 1KB MAUAGEX, OOVT. OP INDIA MESS, UHGIOAD, NEW DELBt-110064

AND PUBLISHED BY THE CONTROLLER OF tVpUCtmOKS, BELBJ-110054, 1978