REGISTERED No. D. (D)-72 The Gazette of India
EXTRAORDINARY
PART I—Section 1
PUBLISHED BY AUTHORITY
No. 195] NEW DELHI, WEDNESDAY, OCTOBER 4, 1978/ASV1NA 12, 1900
Separate paging is given to this Part in order that it may be filed as a separate compilation
(1037)
693 GI/78—1
1038 THE GAZETTE OF INDTA : EXTRAORDINARY [PART I—SEC. 1J 1039 1040 THE GAZETTE OF INDIA : EXTRAORDINARY [PART I—SEC. 1] 1041 JTHE GAZETTE OF INDIA : EXTRAORDINARY [PART I—SEC. 1] 1043 ^ __ INDIA : EXTRAORDINARY [PART I—SEC. 1J, 1045693 GI/78—2
1046 THE GAZETTE OF INDIA : EXTRAORDINARY [PART I—SEC. 1047MINISTRY OF COMMERCE,
import licence as per para 2 of the Public Notice No, 78- lTC(PN)/74 dated 6th June, 1974 issued by the Chief Controller of Imports and Exports.]
CIVIL SUPPLIES & COOPERATION
(Department of Commerce)
PUBLIC NOTICE NO. 72-ITC(PN)/78
New Delhi, the 4th October, 1978
IMPORT TRADE CONTROL
Subject; Terms and conditions applicable to import licences issued under the West German Capital Goods Credit of DM 13.S94 Million for 1977-78.
F. No. IPC/39/10/76.—The terms and conditions govern-
ing the issuance of import licences under Lhe West German Capital Goods Credit of DM 13,894 Million for 1977-78 as given in Appendix to this Public No:ice are notified for information.
APPENDLX TO DEPARTMENT OF COMMERCE
PUBLIC NOTICE NO. 72-ITC(PN)/78
DATED 4-10-78
Conditions attached lo import licences issued under the West German Capital Goods Credit of DM 13.894 Million ior 1977-78.
Sec:ion I--General Conditions,
J. (i)—These conditions will apply to such cases Qf import by public and private sector undertakings as have been speci- fically approved by the Capita] Goods Committee of the Government of India for financing under the West German Capital Goods of DM 13,894 million for 1977-78.
1. (ii)—Where the value of allocation approved by the Capital Goods Committee exceeds the rupee equivalent of DM 1 million [the rupee equivalent being determined at tile exchange rate notified by the Department of Revenue (Cus- toms) under Section 15 of the Customs Act, 1962], the prior concurrence of the West German authorities Kreditanstalt fur Wiedcraufbau (KFW) to the allocation is obligatory, and this would be obtained by the Department of Economic Affairs on the basis of the project data to be supplied by the Indian importer in the form at Annexure I. Till such concurrence from the West German authorities is communi- cated to the Licensing authorities (CCI&E) by the Depart- ment of Economic Affairs, no import licence can be issued in favour of the Indian importer.
I- (iii)—The licence shall bear the superscription "DM 13.894 million West German Capital Goods Credit for 1977-78". The licence code for the first and second suffix will be 'S/GN". These will also be repeated in the CCT&E's letter forwarding the import licence,
I. (iv)—No remittance of foreign exchange will be per- mitted against the import licence, except bank charges which may be remitted through normal banking channel. Pay- ments towards Indian agent's commission, if any, should be made in Indian rupees to the agents in India. Such pay- ments however will form part of the licence value and will therefore be charged to the licence.
I. fv)—The goods and related services to be procured under this import licence can be imported from the Fedcrp.l Republic of Germany including the Land Berlin or any other country. The overseas supplier is, therefore, free to procure material', etc. from a third country, if found neccrsary, for the exe- cution of the contract.
I- (vi)—The minimum value for which an import licence can be issued under this Credit is the rupee equivalent of DM 30,000 [rupee equivalent being calculated at the rate of exchange notified by the Department of Revenue (Cus- toms) which rate of exchange should be indicated in the 1. (vii)—The import licence will be issued on CIF basis with an initial validity of 24 months or the last date of shipment as indicated in para 2 (xii) below, whichever is less subject however to the condition that the import licence will have a minimum validity of 12 months from the date of issue.
I. (viii)—-Firm orders (meaning thereby Purchase Order by the Indian Licensee on the foreign supplier supported by order confirmation from the latter or purchase contract duly signed by bolh the Indian importer and the foreign supplier) must be finalised within a period of 4 months from the date of issue of the import licence [vide Para I (ix) below] Orders on Indian Agents of overseas suppliers ancl/or order confir- mation by such Indian Agents are not acceptable.
1. (ix)—If firm orders, as explained in Para I (viii) above, cannot be finalised within the time limit of four months, the licensee should submit to the Chief Controller of Imports and Exports (CCI&E), or other licensing authorities, as the case may be, a proposal seeking an extension in the order- ing period along with justification and explanation as lo why ordering could not be completed within the iniial validity period. Such requests for extension in the ordering period will be considered on merits by the licensing authorities who may grant extension upto a further maximum peiiod of 4 mon'.hs. If, however, extension is sought beyond 8 mouths from the date of issue of the import licence, such proposals will invariably be referred by the licensing authorities to the Department of Economic Affairs (WE-I Section), Ministry of Finance, North Block, New Delhi who will consider such extension on the merits of each case and convey its decision, to the licensing authorities for communication to the licensee. Only on production by the licensee of such letters of the licensing authorities sanctioning extension, will be authorised dealers in foreign exchange and departmental authorities permit the facility of bank guarantee, letters of authority for the establishment of letter of credit, acceptance of deposits of rupee equivalent, etc.
[. 00—It will be in the interest of the licensee to ensure that firm order is finalised within the stipulated time limit for ordering. In cases where this cannot be done the licence should, of his own, approach the licensing authori- ties for a suitable extension in the period of ordering. The authorised dealers in foreign exchange/departmental authori- ties concerned will exercise necessary checks to ensure that the licensee complies with the requirements of placing orders within 4 months.
1. (xi)—Tn cases where firm orders have not been placed for the full value of the licence during the initial validity period of the licence, it will be necessary for the licensee to obtain the permission of the licensing authorities in the manner as explained in para I (ix) above before placing orders against such unordered balance value of the licence,
Section II-—.Special points to be kept in view while
concluding purchase contracts.
2, (i)—The contract price should invariably be expressed in the currency of the country in which the foreign sup- plier is situated. The contract price should be firm and final and no provision for any escalation would be permitted. If any commission is payable lo an Indian Agent of the foreign supplier it must be distinctly shown in the conii.-ict as an item of cost payable in Indian Rupees in India and the net amount payable to the foreign supplier in foreign currency should therefore be shown exclusive of such Tndian Agent's commission. For the purpose of calculating the value in foreign exchange upto which purchase orders can be placed against the import licence, the value of the im- port licence should be computed at the rate of exchange notified by the Department of Revenue (Customs) under Section 15 of the Customs Act, 1962 and indicated in the import licence as per para 2 of the Public Notice No. 78- ITC(PN)/74, dated 6th June, 1974 issued by the Chief Con- troller of Imports and Exports.
i n 4 ft THE GAZETTE OF INDIA : EXTRAORDINARY [PART I—SEC. 1]2 (ji) Supply orders should be placed either on C1F or C&F basis in the case of private sector importers. In the case of public sector importers the orders r.honld b" placed only on C&F basis.
2. (jii) It should clearly be understood that the purchase contracts under the import licence should be placed after obtaining comparable bids from overseas suppliers. In tins connection it may be noted that the Indian importer is free to import from any country of his choice, as approved by the Capital Goods Committee of the Government of India.
2. (iv>—Minimum value of eligible contract—Provided that the aggregate value of purchase contracts under an import licence m not less than DM 30,000 (in the case of purchases made wholly from the Federal Republic of Germany) or equivalent of DM 30,000 (in the caso of purchases made wholly or partly from countries other than the Federal Republic of Germany) it is permissible for the importer to enter into individual purchase contracts for a value of less than DM 30,000 or equivalent of DM 30,000. This is however subject to the condition prescribed In para 2(xiii) below in respect of purchase contracts under an Import licence the value of which does not exceed the rupee equivalent of DM 1 million.
2. (v)—The purchase contract under the import licence is required to be specifically approved by the Government of India and the Kreditanstalt fur Wiederaufbau (KFW) (the West German Bank Development Loan Corporation through which the West German Capital Goods Credit of DM 13.894 million has been made available) and therefore should in- corporate a specific clause to this effect in the purchase con- tract.
(b) In the case of contracts entered into against an im- port licence whose value is the rupee equivalent of DM 1 million.or less [calculated at the exchange rate notified by til© Department of Revenue (Customs)} the approval of the contracts will not be specifically intimated to the impor- ter. Once the Ministry of Finance, Department of Economic Affairs have forwarded the contract documents to the KFW under intimation to the importer, he may proceed as if the contract has been approved by the KFW also unlesi the KFW raises any objection subsequently in which event the importer will be informed suitably.
(c) In the case of contracts entered into against an import licence whose value is for an amount exceeding the rupee equivalent of DM 1 million [calculated at the rate of ex- change notified by the Department of Revenue (Customs)] the approval of the KFW will be first obtained by the Govt. of India, Ministry of Finance, Department of Economic Affairs and specifically communicated to the Indian impor- ter and until then the contracts should be treated as provi- sionaJ. For this purpose 3 copies of the purchase contract along with a certificate (in triplicate) that orders have been placed after obtaining comparable bids from foreign sup- pliers are required to be sent by the Indian importer to the Ministry of Finance, Department of Economic Affairs KFW (Act/No. 50409100 with Deutsch; Bundesbank. Frank- fortnight from the date of conclusion of the purchase con- tract.
2. (yi)—Where contract is placed or CIF baais and accord- ingly the foreign supplier takes out the marine insurance, th© foreign supplier should arrange to take out Insurance in a freely convertible currency and obtain an undertaking from the insurance company concerned that payment if any arising out of insurance claims, would be made directly in DM to KFW (Act/No. 50409100 with Deutsche Bundesbank, Frank- furt/Main).
2. (vii)—Where contracts are placed on C&F basis, the marine insurance should be taken out with an Indian insur- ance company and the premium should accordingly be paid in Indian Rupees. However the Indian importer should obtain the following undertaking from the Indian insurance company and furnish it (in triplicate) to the Department of Economic Affairs, Ministry of Finance (WE-I Section) along with the contract documents :—
"We shall make remittance in foreign currency to the overseas suppliers for any replacement that may be necessitated by loss or damage to goods.
2 (viii)—As the contracts are required to be placed either on CIF basis or on C&F basis as per para 2(ii) above the foreign suppliers should be made responsible to pay the freight charges in foreign currency, even where Indian ships are used. In no circumstances the freight charges should be paid in Indian rupees.
2. (ix)—Payments to foreign suppliers against the licence will be made by means of a 'Special' letter of credit, as ex- plained in Section III below and no remittance facility wiir be permitted against the import licence for this purpose.
2. (x)—As regards transportation of goods purchased against the import licence, the party responsible for arranging ship- ment of the goods under the purchase contract will be free to choose the carriers. Shipments can be made from the count- try in which suppliers are created or from a third country.
2. (xi) For contracts whose value exceeds DM 1 million in the case of purchases from the Federal Republic of Germany including Land Berin or, in the case of purchases from other countries, for contracts the DM equivalent of whose value exceeds DM 1 million, the purchase contracts should provide for furnishing of performance guarantee by the foreign sup- plier in regard to the performance of the goods supplied (in the case of other contracts, namely for contracts whoso value is less than the limit indicated above, the Indian im- porter is free to decide the question whether or not h- needs a performance guarantee from the foreign supplier). The form of the performance guarantee can however be settled by the Indian importer with the foreign supplier by mutual consent. It should, however, be insured by the Indian importer that payments, if any, due to him from the foreign supplier arising from the performance guarantee stipulations should be made direct to Kreditanstalt fur Wiederaufbau (Acct, No. 504 09100 with Deutsche Bundesbank, Frankfurt/Main).
2. (xlrt)—Payments to the foreign suppliers under the im- port liconce should be completed by the 31-12-1980. A suitable provision should, therefore, be made in the purchase orders/ contracts to ensure completion of shipments and payments by 31-12-1980. In case it is anticipated that payments cannot be completed by that date a request for extension with ade- quate justification must be made to the Department of Econo- mic Affairs (Controller of Aid Accounts and Audit, U.C.O. Bank Building, Parliament Street, New Delhi) by 31-10-1980. Such requests will be considered on merits.
2. (xiii)—In the case of import licences whose value does not exceed the rupee equivalent of DM 1 million, the purchase contracts are required to be submitted by the Indian importer to the Department of Economic Affairs in a single lot. Sub- mission of contracts piecemeal will not be entertained. In this connection the minimum value for eligible contracts ex- plained in para 2(iv) above should be kept in view.
Section III.—Payment to foreign suppliers—'Special' Letter
of Credit Procedure.
3. (i) Request for issue of letter of authority.—Within a fortnight of conclusion of purchase contracts with foreign suppliers against an import licence whose value docs not exceed rupee equivalent of DM 1 million [at the rate of exchange notified by the Department of Revenue (Customs)] or within a fortnight from the date of communication of the Government of India [vide para 2(v)(c) above] conveying the approval of KFW to the contracts placed against an import licence whose value exceed the rupee equivalent of DM 1 million [at the rate of exchange notified by the Department of Revenue (Customs)], ns the case may be the licence should submit the following documents to the Ministry of Finance Department of Economic Affairs, WE-I Section, North Block] New Delhi with the request for the issue of Letter of Authority for opening an irrevocable letter of credit in favour of the foreign supplier concerned.
(a) In respect of contracts against import licence whose value does not exceed the rupee equivalent of DM 1 million.
(i) Three copies of the Purchase Order; and three copies of the foreign supplier's confirmation thereto, duly signed by the Importer and Suppliers, respec- tively or photo copies thereof. Attested copiesor
1049the orders placed on the Indian Agents and con-
firmed by such agents are not acceptable.
OR
Three copies of the purchase contract duly signed by both the Indian importer and the foreign sup- plier or photo copies thereof. Attested copies of the orders placed on the Indian Agents and con- firmed by such Agents arc not acceptable.
(Ii) A request (in triplicate) for issue of Letter of Autho- rity in the form prescribed in Annexure-II.
(iii) A Bank Guarantee in the prescribed form as in Anncxure-UI from an Indian Bank authorised to deal in foreign exchange, (not applicable in the case of Public Sector imports).
(iv) In the case of C & F contract, three copies of the undertaking from the Indian insurance company vide para 2(vii) above.
(v) A certificate in triplicate vide para 2(iii) above that orders have been placed after obtaining comparable bids from foreign supplier ; and
(vi) A certificate that no further contracts will be place
under licence vide para 2(xiii) above.
(b) In respect of contracts against import licence whose value exceeds the rupee equivalent of DM 1 million.—In addi- tion to the contract documents furnished earlier (in respect of which KFW'N approval will have been obtained by the Ministry of Finance, Department of Economic Affairs) vide para 2(v) (c) above or, the following documents should be submitted :—
(i) A request (in duplicate) for the issue of Letter of Authority in th" form prescribe.! in Annexure-IT.
(ii) A Bank Guarantee in the prescribed form as in Annexuru III f.ojn an Indian bank authorised to deal in foreign exchanr.s, (not applicable in the ca.ie of Public Sector imports); and
(iil) In the case C & F contract, three cooies of tha undertaking ffom the Indian Insurance Company vide para 2(vii) above.
3. tli)It is clarified that in the case of public sector imports
no bank guarantee is required.
3. (iii) Opening of Letter of Credit.—Letter of Credit can be opened on the strength of the Letter of Authority of any cue of
(i) The Bayorisch© Verelnsank, Munich, (ii) The Commerzbnk A. G. Frankfurt, (iii) The Deutsche Bank A. G. Hamburg, (iv) The Drcsdner Bank A. G. lungfernstief, Hamburg, (v) Berliner Handles Gasell-schiifi Frankfurter Bank. (vi) State Bank of India, Frankfurt, (vil) Vereins-Und-West Bank, Hamburg.
Tho importers (both in the public sector and private sectors) and their bankers should specifically indicate the Bank selected by them out of the seven banks mentioned in para 3(iii) above.
3. (iv) Failure to make the request fcr issue cf I e'ter of Authority within a fortnight (a) from the date of placement of flrm orders in the caso of orders agairst an import licence wht^e value is fhn rupee equivalent of DM I mililon or lesp or (b) from the date of communication of approval of con- tract by the Ministry of Finance. Department of Economic Affair? in the case of contracts against an import licence whose value exceeds the rupee equivalent of DM 1 million, as the case may be, may be deemed to be a violation of the Import Control Regulations.
3, r(v) Bank Guarantee amount for which it should be exe- cuted.—The Bank Guarantee, where necessary, should be for an amount representing the rupee equivalent of the amount in foreign exchange for which the Letter of Authority is sought plus 1 per cent of that amount towards incidental and commitment charges and in addition interest and other charges as mentioned in Annexure-V. The prevailing rate of conver- sion shall be at the exchange rate notified by the Department of Revenue (Customs) under Section 15 of Customs Act, 1962 and indicated in the import licence as per para 2 of Public Notice No. 78-ITC(PN) /74 dated 6-6-74. This rate is meant only for purpose of arriving at the value of bank guarantee to be furnished by the importer. For purposes of making rupee deposits into Government account towards the foreign exchange cost of Imports made under the licence the rupee equivalent will have to be worked out at the compo- site rate for the D.M. amounts spent by th" designated com- mercial Banks in West Germany in arranging payments to the foreign supplier i.e. either in DM if the foreign supplier is situated in West Germany .(including Land Berlin) or the DM amount for effecting payment in the currency of any other country in which the foreign supplier is located, in terms of the Public Notice No. 15-ITC(PN)/72 dated 28-1-1972 and Public Notice No. 108JTC(PN)/72 dated 21-7-72 and 8-ITC(PN)]76 dated 17-1-76 as amended from time to time. Any change in this regard will be notified as and when neces- sary.
3., (vi) Issue of Letter of Authority.—If the document* specified in para 3(i) above arc found to be in order, the Ministry of Finance (Controller of Aid Accounts & Audit) Department of Economic Affairs, U.C.O. Bank Building, Par- liament Street, New Delhi will issue a letter of authority to tho designated commercial Bank in West Germany (as in An- uexure-IV) authorising payment upto the specified amount to the foreign supplier i.e. cither in DM if the foreign supplier credit to be opened by the importer's bank in India on the nominated commercial Bank in West Germany. A copy of such authorisation will be sent to Indian licensee. The oripi- nal Letter of Authority along with a copy thereof will bo sent to the concerned Indian bank nuthorlsed to open tho Letter of Credit, asking i,t to submit the original Letter of Authority to the .designated commercial Bank in West Germany along with Letter of Credit opened by it. (Such n direction will be as in Anncxure-V), A copy of this communication will also be addressed to the importer.
No Bank in India should provide facUtlM to the license* for establishing a Letter of Credit unless n I e'ter of \ufhm-it" as explained in this para has been received by such a Bank directly from the Controller of Aid Accounts & Audit, Department of Economic Affairs, Ministry of Finance.
3. (viij The "special" Letter of Credit on the designated commercial Bank in West Germany should be opened with- in thirty days from the date of the issue of Letter of Autho- rity under intimation to the Controller of Aid Accounts & Audit Department of Economic Affairs, Ministry of Finance U.C.O. Bank Building, Parliament Street, New Delhi. Other- wise the Letter of Authority already issued will be deemed to be no longer valid.
3. (viii) The payments to the foreign suppliers will be made by the designated Commercial Bank in West Germany on collection of requisite documents and statements. Even where the foreign supplier is situated in a country other than the Federal Republic of Germany (including Land Berlin) the negotiation and payment of documents would be done by the designated commercial Bank in West Ger- many. The designated commercial Bank in West Germany will obtain reimbursement of tlie DM amounts from the West German authorities. In the case of supplies by coun- tries other than the Federal Republic of Germany, the desig- nated commercial Bank in West Germany will obtain reim- bursement from the West German authorities of the amounts in DM spent by it to make the payments to the overseas suppliers in the currency of the country in which they are located.
3. (ix) Incidental bank charges incurred by the both for payment in the Federal Republic of Germany as well as for arranging the payment in third country wherever appli- cable wifl be remitted by the concerned bank in India to the designated commercial Bank in West Germany through the normal banking channel without affecting the Government of India's account.
Section IV—Responsibility for Rupees Deposits into
Government Account :
1 GAZETTE OF INDIA : EXTRAORDINARY [PART I—SEC. Jtf4. (i) The orieinal shipping documents should invariably be forwarded by the designated commercial Bank in West Germany both in the case of imports from We^t Germany including Land Berlin and other countries, to the concer- ned bank in Fndia who should, within 10 days of the receipt of the documents, release those negotiable set of documents to the licensee but only nfler ensuring that the rupee equi- valent of DM. amount paid to ths German supplier or the DM amount spent in arranging the payment to the supplier in third country by the designated commercial Bank in West Germany plus 1 per cent thereof towards incidental and cotnit- ment charges, together with interest charges on the 'above aggregate amount for the period from the date of payment to the foreign supplier lo the date of deposit of the rupee equivalent into Government Account (both days inclusive) is recovered from the importer and deposited into Govern- ment account, "In terms of Public Notice No. 46-lTC(PN)/ 76 dated the 16th June, 1976, ths interest charges are to be calculated as under in respect of deposits made into the Government Account on or after 15th June, 1976,
(i) where deposits are made within 30 days after from ihe date of payment to the supplier.
9 % per annum
(ii) where rupee deposits are made more than 30 days afler the Date of payment to the supplier, (a) for the first 30 days 9% per annum
(b) for period in excess of 30 days 15% per anni'm
The oxheange rate to be adopted for computing the rupee equivalent of the foreign currency payments made to the foreign supplier will be the composite rate of exchange as laid down in CCI&E's Public Notice No. 8-lTC(PN)/76 dated 17-1-76 or an may be notified by the Government from time to time through Public Notices of the CCJ&E or through the Exchange Control Circulars of the Reserve Bank of India. It will be the responsibility of the Indian Bank concerned to ensure that the amounts due are correctly de- posited into Government Account before the original shipp- ing documents are handed over to the importers. The licen- see should also-ensure that the amounts due are correctly deposited into Government Account before taking delivery of the documents from their bankers.
4. (ii) The deposits envisaged in para 4(i) above may be
made in cash cither at the Reserve Bank of India New Delhi or the State Bank of India, Tis Hazari, Delhi, or if this is not feasible, the amounts may be remitted by means of a demand draft drawn on and in favour of the Agent, State Bank of India, Tis Hnzari, Delhi-6 for credit to Government account as contemplated in Public Notice No, 233-TTC(PN)/ 68, dated the 24fh October, 1968 as amended vide Public Notice No, 74-ITC(PN)/74 dated 31st May, 1974 and Pub- lic Notice No. 132-1TC(PN)/71 dated the 5th October, 1971, The Head of Account to be credited is : "K-Deposits and Advancs—-b—Deposits not bearing interest—843--Civil Deposits—Deposits for purchases etc, abroad—Direct Payment Procedure Deposits for cost of supplies and equipment ob- tained under the West German Capital" Goods Credit VXI for 1977-78 (DM 13.894 millions Credit)".
4. (iii) Remittance will be made in the. Challan form pres- cribed in Public Notice No. 74-ITC(PN)/74 dated the 31st May, 1974.
4. (iv) One copy of the Challan from the Reserve Bank of India, New Delhi or the State Bank of India, Tis Hazari. Delhi-6 or intimation regardinc the submission of Demand Draft to the State "Rank of India. Tis Hazari. Delhi-6 should be sent by the Indian Bank, which has issued the guarantee, to the Controller of Aid Accounts & Audit. Deoartra-rit of Economic Affairs, Ministry of Finance, UCO Bank Build- ing, Parliament Street. New Delhi-! along with a forwarding letter, giving full details of the Advice Notes received from the concerned' nominated German Bank.
4. (v) It will be obligatory for the importers to make the requisite rupee deposits through authorised dealers only and also lo wet the exehanee control cony of the licence endorsed by them, as required in Public Notice No. J84-ITC (PN)/68, dated the 30th Augusf, 1968, They should also fil in the requisile "S" forms as prescribed by the Reserve Bank of India.
4. (vi). After the imports under a licence are completed and the importers/bankers have deposited into Government account all the amounts due, details of the imports received nncl of rupee deposits made should be furnished to the Con roller of Aid Accounts and Audit, Ministry of. Finance, Department of Economic Affairs, UCO Bank Building, New Delhi-1 in the praforma prescribed as Annexure-VI to enable the Ministry of Finance to verify and arrange for release of the bank, "giiarurvec furnished by the importers, wherever necessary.
Section V—Alteration in the contract :
Any ma'erial alteration in the contrac s pertaining to Ihe list of goods, terms or schedule of payments, value _ of goods, etc;, will require the prior approval of the Ministry of Finance and the KFW authorities, whethir it results in earlier payments, or in postponement of payments,
Such rdtcration(s) should be promptly intimated by the importer to the Department of Economic Affairs, Ministry of Finance, New Delhi, (WE-I Section, North Block) for securing the approval of the Government of India/KFW in the same manner as explained in para 2(v) above.
Section VI—Reporting :
A quarfer.y report commencing from the da'e of issue of the licence should be furnished in duplicate us in Annexure- VII to the Ministry of Finance, Dcpar ment of Economic Affairs (WE-I Section Room No, 269, North Block), New Delhi showing progress of ordering delivery of goods, pay- ments to foreign suppliers', etc. and should be continued till all shipments and payments under the contract have been comple- ted. In the case of allocation exceeding the rupee equivalent of DM 1 mil/km (at tht exchange rate notified by the Depart- ment of Revenue (Customs) the licensee should, in addition to the above mentioned quarterly reports submit a half-yearly report as on 30th June and 31st December each year in th: prescribed proforma ut Annexuro VTII (duplicate) on special event, if any, on the progress of the project and on adherence to the time-schedule for completion of project alongwlth Ann- ual Report (2 copies) of the Indian importing company for at feast three years' until completion of the project.
Section VII—Miscellaneous Provisions :
7.—(i) The licensee should apprise the supplier of any special provisions in the import licence which may affect the suppliers in carrying out the transac-ions,
7. (ii) Disputes :
It should be understood that the Government of India wi 1 not undertake any responsibility for disputes if any that may arise between the Indian importer and the foreign supplier.
7. (iii) Compliance with Instruction!!
The licensee shall promptly comply with any direction*, instructions or orders issued by the Government of India from time to time regarding any and all matters arising from or pertaining to the import licence and for meeting a]! obliffa ions under the DM 894 mil ion Capital Goods agreement with the KFW authorities,
7. (rv) Breach or Violations :
Any breach, or violation of condi ions set forth in itic above clauses will result in appropriate actiop under the Imports and Exports (Con'rol) Act.
7. (v) List of Annexures—
A nnexure-I—Project data form.
Annexure-IT—Form of Request for issue of Let'er of Authority.
Annexure-III—Form of Bank Guarantee.
Annexure-IV—Form of Letter of Authoriy. Annexure-V— Letter of Instructions forwarding the
Le'tcr of Authority.
1051Annexure-VI—Form of report of rupee deposits-cum-
applica'ion for re'ease of Bank Guarantee,
Annexure-VII—Form for submittine quarterly report.
Anncxure-VITT—Form of Half-yearly Progress Report
(applicable to coses exceeding rupee equivalent of
DM 1 million).
ANNEXURE-I
PROJECT DATA FORM
KREDITANSTALT FUR WIELDERAUFBAU
6, Frankfurt/Main, Federal Republic of Germany Palmen-
gartenstrasse 5-9
Application for Foreign Exchange from German Capital Goods Loan
PROJECT DATA
(1) Applicant (Firm)—
(a) Registered Office (address incl. State) (b) Public Sector or private sector undertaking. (c) Business Line/Branch of Industry. (d) Partners of Company. (e) Foreign Collaboration Agreement.
(2) Type of capital goods to be financed.
(3) Choice of capital goods based on—please indicate the procurement procedure followed. Since the Capital Goods Loan is available for purchases from any country, an indica- tion should bo given whether tender enquiries were made/ floated in various coun'rics and the basis on which the selection of a particular supplier has been made.
(4) Suppliers (name and address).
(5) Short description of the whole project (for which such
capi!al goods are required)
(6) Local and foreign exchange cost of the whole Project,
with following break-down of figures
—Land and building —Machinery and equipment —Operating Funds —Miscel'aneous
(7) Local and foreign financial sources for the whole, project 'Quanti'ative statement concerning means of financing. Ii should be confirmed that Rupee-financing is secured and that foreign exchange requirements not covered by this application are met),
(8) Letter of Intent tor .Industrial Licence received.
(9) Annual reports with balance sheets and profit and loss accounts for the last two years. If available forecast ot cash-flow and profitability.
(10) Capacity.
(a) Average utilization of existing capacity during the
last two years.
(b) In case of under utilization, please give main reasons.
(11) SJ1:S (last two years).
(12) Market position of ,!he products 10 be manufactured (if possible figures showing past and expected development).
(13) Employment—
(a) Present number ot employees.
(b) Additional employment after completion of project.
(14) Source of raw material supplies.
(15) Time-lable for the execution of the project.
ANNEXURE-II
REQUEST FOR ISSUE OF LETTER OF AUTHORlTY
To
The Controller of Aid Accounts & Audits, Ministry of Finance, Deportment of Economic Affairs, UCO Bank Building, Parliament Street, New Delhi-1.
SUBJECT :—Import of from—— . under West German Capital Goods Credit for
"1977-78 (DM 13,894 million Credit).
Sir,
In connection wi h the import of——
from——•—-—— — under the above mentioned West German Capital Goods Credit, we furnish the following parti- culars to enable you to issue the authoriy for opening tha letter of credit through on the Baycrich© Mereinsbank, Munich, or Commerzbank A.G., Frankurt or Deutsche Bank, A.G., Hamburg or the Dresdner Bank. A.G., Jungferstief, Hamburg or the Frankfurter Bank, Frankfurt/ AM Main or State Bank of India, Frankfurt or Vereins-Und West Bank, Hamburg.
(ii) Name mid Address of the Importer :
(i) Whether a public or priva'e sector undertaking,
(ii) Category of industry to which it belongs,
(iii) The State in which ii, is located.
(b) Number, date and value of l'icence, (photostat copy
of the licence should be attached).
(c) Value in foreign currency and date of the order placed and accepted by llie suppliers, indicating payment terms viz., (c.i.f, or C&F) (In no case, Letter ol Authority should be applied for f.o.b. value only).
(d) A certificate in duplicate that firm orders (with sup- pliers oider confirmation) have been placed wkhin a period of 4 months from the date of import licence. If orders have been placed after the stipulated period of 4 months, a copy of CCI&E's letter/Ministry of Finance's letter authorising extension of time for p'acing firm orders as the case may be, should be attached.
(e) A certificate in triplicate that firm orders have been placed after obtaining comparable bids from overseas suppliers and that the lowest technically suitable offer has been accepted. In case it is not possible to obtain comparable bids, e.g. propriotory item, full justification therefore should be "furnished.
(f) Short description of lhe goods to be imported.
(fi) Net foreign currency amount payable to Suppliers (to be expressed in the currency of the country in which supp'iers is located) for which Letter of Aulhority is required (excluding Agency commis- sion).
(h) Amount of agency commission in foreign currency
and Name and Address of Indian Agent.
(i) In case the supplier happens to be located in a country other than West Germany, the name of the supplier's bank to whom the amount is to be remitted by the designated Commercial1 bank in West Ger- many should be indicated.
(j) Expected date of completion of delivery.
(k) A schedule showing probable dales on which pay-
ments under the contract wi 1 fall due.
(1) In the case of import licence upto a value which is equivalent to DM 1 million, a certificate that all the contracts against the import licence have been placed and that no furlher contract will be placed
195 2 THE GAZETTE OF INDIA : EXTRAORDINARY [PART I—SEC. 1]The Letter of Credit will be opened through :—
(Name and address of the Indian scheduled bank, authorised to deal in foreign exchange)
and the Bank Guarantee No. dated
for Rs.—— furnished by the above mentioned bank and which has been fully adjudica- ted by the Collector of Stamps, in accordance with Section 31 of the Stamps Act, 1899 is attached.
Youra faithfully,
(Licensee)
Copy forwarded to Bank, for information.
ANNEXURE-III GUARANTEE BOND
President of Tndia,
In consideration of the President of India (hereinafter called the Government (having agreed to arrange for payment in (mention the appropriate amount in foreign currency) for the import of : by
(herenafter called the importer') aginst the licence No.
-
_— — —dated issued under the terms and conditions nf West German Capital Goods Credit for 1977-78 and in pursuance of import in favour of the importer against the above mentioned agreement, v/e Bank, at the request of the importer hereby undertake to arrange to deposit the amount of the disbursements made by me
(Name of the Commercial Bank in West Germany) nomi- nated by the importer converted at the prevailing rate of ex- change calculated as per instructions issued by the Government in the matter from time time plus 1 per cent thereon within 10 days of the receipt of advice of payments, for credit to the Government account, in the manner and against the appropriate Heads of Accounts as indicated by Government of India under the said credit together with interest therein at the rates of 9 per cent per annum for the first 30 days and at 15 per cent annum for the peripd in excess thereof reckoned from the date of payment to the foreign supplier to the da^e of deposit of rupees equivalent for credit into the Government account. The negotiable set of import documents received from the designated commercial Bnnk in Wesl Ger- many will be released to the importer only after the rupee deposits contemplated above have been made.
2. We, ihe- ———— Bank also under- take to indemnify and keep indemnified the Government against any default in payment bv the Importer of any sum that may be due and payable from time to time by *he Importer to the Government at such place and in such manner as the Government may from time to time direct, such sums not exceeding Rs.- or any part there- of ; for the time being due and payable by the importer together with interest thereupon at the rate of 9 per cent per annum for the first 30 days and at 15 per cent per :.nmiii for the period in excess thereof, rekoned from the date of payment to the foreign supplier. The decision of the Gov- ernment as to any default in the said payment by thj im- porter, or on his part and in regard to the amount payable to the Government by us—————Bank shall be final and binding on us Bank.
3. We Bank further agree that in case of increase in the value of imrjorts or decrease in the value of unfulfilled deliveries under the contract as a result of change in the composite rate of exchange, the amount of his guarantee bond will be adjusted as on the date when the change takes place, in proportion to this change.
4. We—•——• Bank further agree that Ihe guarantee herein contained shall remain in full force and effect during the period that would be taken for the performance of the said Agreement/contract and that it shall continue to be en- forceable till all the dues to the Government under, or bv virtue of this gurantee have been fully paid and its claims satisfied or discharged.
5. The guarantee herein contained shall not be affected by
any change In the constitution of the imnorter or the Bank and the Government shall have the fullest liberty with our affec'ing the guarantee to postpone for any time and from time to time any of the powers exerefsab'e by it against the importer and the Bank shall not be released from its liability under this guarantee by an> exercise of the Government of the liberty with reference to the matters aforesaid or by reason of time being given \o the Importer or any other forebearance, act or omission on Ihe part of the Government or any indulgence by the Gov- ernment to the Importer or by any o'her matter or thingi whatsoever which under the law relating to sureties shall but for this provision, have the effect of so releasing the
-Bank from its such liability,
6. We Bank lastly undertake not to revoke thii guarantee during its currency, except with previous consent of the Government, in writing.
7. Our liability under this guarantee is restricted to Rs.
(plus interest and other charge*. not expected to exceed 1 per cent of the guarantee amount) and it will remain in force till the —-—.——day of* (month) - 19. . Unless claims under the guarantee are made in wrinting within 6 months of this dati nnd unless a suit or action to enforce these claims is com menccd within another six months thereafter I.e. upto_
, all Government rights under this guarantee shall be forefeited and we shall be relieved and discharged from all liability thereunder.
Date the day of
for Bank.
Accepted for and on behalf of the President of India, by Shri (Name and designation). Signature
Signature
This date nhall be arrived at by adding one month to ihe dale up!o which the Letter of Authority is required to be kept valid.
Notes :—(1) The value of the stamped paper in which this guarantee is to bt executed is to be adjudicated by the Collector of Stamps under Section 31 of the Indian Stamps Act.
(2) The value of the Bank Guarantee vide paras 2 & 7 above shall be arrived at after adding 1 per cent to the net C & F or CIF value of the contract con- verted into rupees at the Customs Exchange Rate pre- vailing on the date of issue of the Import Licence.
ANNEXURE-IV
LETTER OF AUTHORITY NO.
Government of India
MINISTRY OF FINANCE
Department of Economic Affairs
New Delhi, the 197
To
(Name & Address of the German Bank)
Dear Sirs,
Subject :—Procedure for payments to overseas suppliers through the Letter of Credit Ctover Deposit Account with you under DM 13,894 million Capi- tal Goods Credit for 1977-78 (AL— ) from the Federal Republic of Germany,
In accordance with the terms and conditions of the above procedure, agreed upon through letter No. —— • dated the ——-— —addressed to your Bank by the Chief Accounting Officer, High Commission of India, London we hereby authorise you to spend such an amount in DM as may be found necessary to pay (the amount in foreign currency concerned) to (name of the supplier) (ap- plicable in the case of third country suppliers) or to pay an amount of DM ••- •— to , , (applicable in the case of West German suppliei), as the case may be, under the letter of credit to be opened by for covering the import of— . -—against contract entered into by __ ,
10532. After each payment, the shipping and other documents (negotiable) may be forwarded direct to and a payment advice alongwith one set of documents (non- negotiable) sent to the undersigned for information.
3. Your banking charges under the above letter of credit
will be settled directly with you by the-^
by remittance from India.
4. This authority will remain valid upto 197
Yours faithfully,
(Accounts Officer)
ANNEXURE-V
Subject :—Import under West German DM 13.894 Million Capital Goods Credit for 1977-78 Issue of Letter of Authority for opening Letter of Credit Import Licence No. —^ : dated • .
Dear Sirs,
With reference to letter No.—' dated the — from the in which they have requested permission for opening a letter of cerdit through your bank under the west German DM 13.894 Million Capital Goods Credit for 1977-78, I am U endows the De- partment of Economic Affairs Letter of Authority No.
(with the spare copy)
Dated the authorising them to arrange payment upto —• •-.•-—— :—,—to the foreign supplier. The letter of Authority should be sent by you to the alongwith the letter of credit opened by you.
2. You are hereby authorised to open the Letter of Credit for an amount not exceeding wltbin a period of thirty days from the date of this letter, under in- timation to this Department. In terms of para 10, Section VIf of the Exchange Control Manual, you are required to ensure that the date of expiry of the Letter of Credit i" not later than 45 days, after the finar date for shipments seated in the relative import licence or the date indicated in the Letter of Authority whichever is earlier. Before opening the Letter of Credit, it may please be ensured that the importer is iri possess jon of a valid Import Licence.
3. You are requested to arrange to deposit the rupee enqui- valpnt.of the awwiurits in Deutsche Mark spent by (name of the designated' Commercial Bank in West Wermany) to effect payments in D.M. to the suppliers in the Federal Republic of Germany including Land Berlin or in other foreign currency to the foreign • supplier in other countries plus 1 per cent towards incidental and Commitpient Charges in terms of the Guarantee furnished • by you, within 10 days of the receipt of documents from the
—• •• — •.•—-. The rupee equivalents of the amount
disbursed to the foreign suppliers will have to be calculated by applying the prevailing rate of conversion as. instructed in Public Notice No. 15-TTC(PN)/72f dated 28-1-72 and Public Notice No. 108-TTC(PN)/72, dated 21-7-72 and 8-ITC(PN/ 76, dated 17-1-76 until further notice. This rate is subject to revision if and when the IMF parity rate of exchange under- goes change. Interest at the rate of 9 per cent per annum for the first 30 days and at 15 per cent per annum for the period in excess thereof reckoned from the date of payment to^the suppliers and the date on which the rupee equivalents are deposited (both days inclusive) is also required to b" deposited into Government account. It will be your responsi- bility to arrange for the deposit of these amounts, before the shipping documents are handed over to the importers.
4. These amounts should be deposited either with the Reserve Bank of India, New Delhi or the State Bank of India, Tis Hazari, Delhi or remitted by means of a demand draft obtained by you from any branch of the State Bank of India or its subsidiaries (Drawer) drawn on and made payable to the State Bank of India, Tis Haari Branch, DeIhi-6 (Drawee and Payee). In this connection, your attention is also invited to the provisions of the Public Notice No 233- ITC(PN)/78, dated the 24th October, 1968 as amended by Public Notice to 74-ITC(PN)/74, dated 31-5-74 and No. 132- ITC(PN)/71, dated the 5th October, 1971. The head of
963 GI/78—3
account to be credited is : "K^Deposits and Advances^b-Deposits not bearing interest-843-Civil Deposits-Deposits for purchases etc. abroad under Direct Payment Procedure Deposits for cost of supplies and equipment obtained under the West German Capital Goods Credit IX for 1977-78 (DM 13.894 million Credit).
5. One copy of the chalten in original, in cases where the rupee equivalents are credited in cash at the Reserve Bank of India, New Delhi or the State Bank of India, Delhi should be sent by you to the address given below, alongwith a for- warding letter giving fuFl details of the Advice Notes received from the nominating German Bank.
The Cfcntroller of Aid Accounts & Audit, Ministry of Finance, Department of Economic Affairs, UCO Bank Building, Parliament Street, New Delhi.
In cases where the rupee equivalents arc remitted by means of demand drafts as laid down in the pubKc Notice dated the 24th October, 1968 mentioned above, intimations thereof should be sent to the address given above. In all cases, full particulars of the rupee equivalents deposited alongwith the amount of interest paid and the period for which interest has been calculated should be furnished to this Department.
6. A payment clause to the effect that the insurance claim, if any, received from the foreign Insurance Company and/or claims, if any, arising out of Bank Guarantee relative to per- formance guarantee should be remitted by the Insurance Com- pany and/or the Bank giving the guarantee in DM direct to KFW (Account No. 504 : 09100 with Deutsche Bundesbank, Frankfurt/Main) under advice to the Controller of Aid Accounts & Auidt Ministry of Finance, Department of Eco- nomic Affairs, New Delhi, may be inserted in the Letter of Credit to be opened by you.
Yours1 faithfully,
Accounts Officer
'• Copy forwarded to M /s . with a copy of the Letter of Authority No. for information, with reference to their letter quoted above.
Accounts Officer.
ANNEXURE-VI Proforma
1. Name and full address of the importer/licensee on
whose behalf the Bank Guarantee was furnished.
2. The import licence number and date and value.
3. Number, date and amount of the guarantee furnished. 4. Particulars of the Letter of Authority for opening Letter of Credit obtained from the Ministry of Finance.
(a) Number and date of the Letter of Authority.
(b) Amount of the Letter of Authority (in forefgn
currency).
5. Particulars of Imports effected and rupee deposhe
made.
(a) Name of suppliers.
(b) Amount (in foreign currency) actually paid tc
the supplier(s) mentioned at (a) above.
(c) Date of payment to the supplier by the nomina"
ted Bank in West Germany.
(d) Amount of rupee deposits :—
(i) Rupee equivalent of foreign currency amount paid to the supplier @ (1 unit of foreign ex-
change ~Rs. )
(ii) Interest paid.
(iii) Period for which the interest has been calcu-
lated from
to
(iv) Total deposit made.
1054 THE GAZETTE OF INDIA : EXTRAORDINARY {PART I—S"& \%2. State in which it is located
(v.) Date and place of deposit.
,(vi) Number and date of the Treasury Challan (to
be enclosed). If the Treasury Challan has al-
ready been sent, reference to the letter number
and date with which it was sent may b" quoted.
(if the factory is located in
State other than the State
in which the Head Office is
located, it should be dearly
indicated).
3. Whether a public sector or
private soctor undertaking.
4. Branch of Industry to which
(vii) If the rupee deposit mentioned in (dXiv) above
wan made by moans of Demand draft, the
number, date and amount of the draft and
particulars of your letter with which it was
sent to the Accountant General, Central Reve-
nues, to be indicated.
it belongs.
6. Amount utilised and balance unutilised (in foreign
5. Value of allocation under
currency) against each Letter of Authority.
the credit approved by the
Government of India.
6. Brief Description of the pro-
7. A certificate that the balance indicated in 6 above, has
not been utilised and no shipment has been made
thereof, and the same may be treated as lapsed.
(Authorised signatures)
ject including description of
the Capital Goods items of
manufacture.
PROFORMA
7. No,, date and value of the
import licence.
Name of
company
8. Value of supply contract (a)
under the licence in DM.
Category
of
Industry
Address
of
Company
Amount of
allocation
Rs.
Private
Sector/
Public
Sector
9. Amount paid to the suppliers
as on in D.M.
3
3
2
4
1
ANNEXURE-V1I
10. If there is a balance In the
import licence, whether it
is likely to be utilised.
If so, how much and how soon
it is going to be utilised
by further contracting.
11. Keeping of time schedule
comparison of schedule with
actual dates, reasons for
changing the time schedule.
Value
of
L.C.
Value of
contract
(foreign
enrrency)
No. date
& value
of I.L.
Rs.
Amount
paid
against
theLC
(foreign
currency
12. If not, revised time-table
7
8
9
6