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Dated: 12.03.2025

DGFT Simplifies Export Rules for Repaired SCOMET Items

Introduction

The Directorate General of Foreign Trade (DGFT) has issued Public Notice No. 50/2024-25, dated March 10, 2025, amending Paragraph 10.12(D) of the Handbook of Procedures (HBP) 2023. This amendment introduces a streamlined procedure for the General Authorization for Export after Repair (GAER), enabling easier re-export of SCOMET items to related entities and repair supply chains abroad.

This revision significantly simplifies the export process for goods repaired in India, ensuring faster clearance and reducing bureaucratic hurdles for businesses engaged in repair and maintenance services.

Key Provisions of the GAER Amendment

1. Definition of Related Entities and Repair Supply Chain

• Related Entities:
  • Direct subsidiary or foreign parent of the Indian company.
  • Another subsidiary of the foreign parent of the Indian company.

• Repair Supply Chain:
  • Authorized Vendors.
  • Original Equipment Manufacturers (OEMs) with a Master Service Agreement (MSA), Electronic Manufacturer Service (EMS) agreement, or Contract Agreement to conduct repairs in India.

2. General Authorization for Re-Export After Repair

• Scope: The GAER applies to the re-export of imported SCOMET items to the same related entity or repair supply chain in a foreign country after repair in India.
• One-Time Registration: Exporters must obtain GAER only once, valid for one year.
• Post-Reporting Requirement: Exporters must submit quarterly post-shipment reports to DGFT.

3. Conditions for GAER Eligibility

• Items must be imported under a valid contract agreement for repair.
• The Bill of Entry for the first shipment must be provided while applying for GAER.
• The export destination must remain the same as the original importer.
• No modification or value addition to the SCOMET item is allowed during repair.
• No new GAER is needed for subsequent shipments unless the product, buyer, or end user changes.
• No authorization will be granted if the initial export license is suspended, revoked, or modified.
• GAER will not be issued for UNSC-sanctioned destinations or high-risk entities.

Required Documents for GAER Application

1. Proof of Import

• Original Export Authorization (if applicable) issued by the foreign country.
• Bill of Entry for the first import shipment.
• Self-declaration stating that the item does not require a license for import into India.

2. Contractual Agreements for Repair

• Contract Agreement, Master Service Agreement (MSA), or Electronic Manufacturer Agreement (EMS) between the Indian exporter and:
  • Foreign parent, direct subsidiary, or another subsidiary of the parent company.
  • Authorized Vendor or OEM with a valid repair agreement.

3. Exporter’s Undertaking

A formal undertaking (on company letterhead) must include:

• Details of the imported SCOMET item (subcategory number, description, quantity, ECCN code if applicable).
• Confirmation that the exported item is unchanged and no modifications were made.
• Agreement to provide shipping bills, Bills of Entry of the destination country, and submit quarterly reports to DGFT.
• A declaration that items will not be used for military applications or development of chemical, biological, or nuclear weapons.

4. Compliance and Certifications

• Internal Compliance Program (ICP) Certification:
• Mandatory for intra-company transfers.

• Authorized Economic Operator (AEO) Certification:
• Required for exports to vendors or OEMs.

Post-Reporting Requirements

• Exporters must submit a quarterly report of all GAER shipments to DGFT’s SCOMET Division (New Delhi) via email or an approved reporting system.
• Reports must include:
  • Bill of Entry and shipping bill details.
  • Valid export license copy.
• Failure to report shipments may result in penalties, suspension, or revocation of GAER.

Suspension or Revocation of GAER

GAER may be suspended or revoked by DGFT if:

• The exporter fails to submit required reports or documents.
• The exported items are found to be used for prohibited activities.
• There is an adverse report on proliferation concerns.

General Conditions & Restrictions

• GAER will not be granted for items used in the development of weapons of mass destruction (WMDs) or for military purposes.
• GAER will not be issued for exports to UNSC-sanctioned destinations or high-risk entities.
• DGFT reserves the right to deny or recall GAER authorization at any time.

Effect of the Amendment

With this amendment, exporters of SCOMET items for repair can now use a one-time authorization (GAER) instead of applying for approvals for each shipment. This new provision streamlines trade operations and supports India’s positioning as a global repair hub.

Exporters and manufacturers are encouraged to align their compliance programs with DGFT’s new GAER framework to ensure smooth re-export operations.

The amended Paragraph 10.12(D) introduces the General Authorization for Export after Repair (GAER), allowing re-export of imported SCOMET items to related entities or authorized vendors after repair in India. This one-time authorization, valid for one year, simplifies the export process by eliminating the need for separate approvals for each shipment, requiring only quarterly post-export reporting to DGFT.

In case you face any issues related to Indirect Tax-Customs, GST, Foreign Trade Policy (FTP), Arbitration matters and Central Licensing and related advisory matters in India then please feel free to get in touch with SJ EXIM Services.

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Source: DGFT

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