Automatic import licensing

WTO states, that “automatic import licensing (licensing maintained to collect statistical and other factual information on imports) is defined as import licensing where the approval of the application is granted in all cases (Article 2.1)”. It clarifies that these procedures are not to be administered in such a way as to have restrictive effects on imports.

The Tokyo Round Import Licensing Code was among the agreements covering non-tariff measures that was concluded during the multilateral trade negotiations held between 1973 and 1979. It entered into force on January 1, 1980 with the objective of preventing import licensing procedures from unnecessarily hindering international trade. As a stand-alone agreement, this code was only binding on countries, which had signed and ratified it. During the Uruguay Round, it was revised to strengthen disciplines on transparency and notifications. The revised Agreement was brought into force on January 1, 1995 and is binding on all WTO Members. The general provisions are as follows:

Neutral application, fair and equitable administration

Members are to apply import licensing procedures neutrally, and administer them in a fair and equitable manner (Article 1.3). Applications are not to be refused for minor documentation errors, not to be penalized heavily for any omissions or mistakes in documentation or procedures obviously made without fraudulent intent or gross negligence (Article 1.7). Licensed imports are to not be refused for minor variations in value, quantity or weight from the amount shown on the licence for reasons consistent with normal commercial practices (Article 1.8).

Publication of rules and procedures

Rules and all information concerning procedures for the submission of applications, including the eligibility criteria for applicants, the administrative bodies to be approached and lists of products subject to import licensing are to be published, whenever practicable, 21 days prior to the effective date of the requirement but in all events not later than the effective date (Article 1.4 (a)).

Simple forms and procedures

Applications forms and renewal forms are to be simple (Article 1.5). Application procedures and renewal procedures are to be simple. Applicants are to be allowed a reasonable period to submit licence applications. Where there is a closing date for applications, this period should be at least 21 days. The number of administrative bodies which an applicant has to approach in connection with an applications is not to exceed to a maximum of three (Article 1.6).

Other principles

— Foreign exchange for licensed imports is to be allocated on the same basis as for goods not requiring import licences (Article 1.9).

— The security exception provisions of Article XXI of GATT 1994 apply (Article 1.10).

— Members are not required to disclose confidential information contrary to the public interest or which would prejudice the legitimate commercial interests of particular enterprises (Article 1.11).

Conditions
Automatic licensing procedures are not to be administered in such a way as to have restrictive effects on imports; there should be no discrimination among those applying for automatic licenses. Any person fulfilling the legal requirements should be equally eligible to apply for and obtain import licenses.

According to DGFT, imports into India will be allowed without an import license/authorization/permission to the following categories of importers, provided the imports do not involve any remittance of foreign exchange:

(i) Import of goods by officials of the United Nations Organisation (http://www.un.org/en) and its specialised agencies who are exempt from payment of customs duty under the United Nations (Privileges and Immunities)
Act, 1947 (this Act can be accessed from website of Ministry of External Affairs – www.mea.gov.in);

(ii) Import under Baggage Rules (The Rules can be accessed from the website of Central Board of Excise and Customs – http://www.cbec.gov.in/travellers.htm) of used professional equipment, instruments or apparatus by professionals and doctors returning to India for permanent settlement;

(iii) Goods imported as baggage by the members of foreign mountaineering expedition teams (details can be accessed from the website of Indian Mountaineering Foundation – http://www.indmount.org), subject to the condition of export of such items except items consumed;

(iv) Paintings and other display articles required for competitions or exhibitions, subject to the condition of export of such items except consumables;

(v) Food-stuffs, medicines, clothing and blankets received by any charitable organisation registered with Ministry of Tribal Welfare (http://tribal.nic.in/index.asp) / Ministry of Social Justice & Empowerment (http://socialjustice.nic.in/) and Ministry of Home Affairs under Foreign Contribution Regulation Act (http://mha.nic.in), as a gift from any philanthropic organisation or person abroad, for free distribution either by itself or other charitable organisations to the poor and needy without any distinction of caste, creed or colour;

(vi) Import of food parcels (except alcohol and tobacco) by foreign citizens, ordinarily residing in India, subject to a limit of Rs. 1,00,000/- per year for their own use;

(vii) Humanitarian Aid:

(a) Goods received as free gifts by the Indian Red Cross Society (http://www.indianredcross.org/) from abroad, provided such goods are exempt from customs duty;

(b) Relief supplies and packages received as gifts through a Government agency or any other approved agency covered by an agreement entered into by the Government of India with a foreign Government, provided they are exempt from Customs duty;

(c) Articles donated to the National Defence Fund (the details can be accessed from the website of the Prime Minister of India – http://pmindia.nic.in/pmfunds.php) or to the Government of India for use of the Defence personnel and wool/woollen fabrics and woolen apparels donated to the Indian Red Cross Society, provided the same are exempt from Customs duty.

(viii) Equipment and raw films imported by foreign TV companies coming to India on visits sponsored by the Ministry of External Affairs / Ministry of Information and Broadcasting (http://mib.nic.in/) or Ministry of Tourism (http://tourism.gov.in/) on re-export basis.

Sources: WTO; DGFT

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