Notifications

July 19, 1999

IECD.No.1 /08.14.01/99-2000

The Chairman and Managing Director/
Chief Executives of all commercial banks

Dear Sir,

Please refer to our circular IECD No. 25/08.14.01/97-98 dated December 17, 1997 regarding the levy of Interest Rate Surcharge on Import Finance. In terms of the instructions contained therein, the following categories of bank credit for imports are exempt from the levy of Interest Rate Surcharge.

1. Export Packing Credit provided at concessive rate of interest to meet the cost of imported inputs.
2. Import of capital goods by bonafide borrower-importers under valid Licences issued under the Export Promotion Capital Goods Scheme (EPCG Scheme).
3. All bonafide imports including import of capital goods by Export-Oriented Units (EOUs) and units in the Export Processing Zones (EPZs).
4. All bonafide imports under Advance Licences granted for import of "Inputs" such as raw materials, intermediates, components, etc., by either the original holder or a transferee (if transferred under an endorsement of the Directorate General of Foreign Trade enabling such transfer).
5. Bulk Imports in respect of crude oil, petroleum products, fertilisers, edible oils and other essential commodities imported through Government Agencies.

2. It has now been decided that, apart from the above-mentioned categories of bank credit for Import, the following two categories of bank credit for Import will also be exempt from the levy of Interest Rate Surcharge with immediate effect.

1. Import of crude oil by private and joint sector refineries for actual use in their own refineries; and
2. All bonafide imports against the credit under the Duty Entitlement Pass Book (DEPB) Scheme contained in the EXIM Policy 1997-2000.