Focus Products scheme

No.14/005/106/2006                                                                                             June 12, 2006

Members of the Council

Dear Members,

Sub: Focus Products scheme

We invite your kind attention to Council’s circular of even number dated April 7, 2006, enclosing therein Highlights of the Annual Supplement to Foreign Trade Policy 2004-09, announced by Hon’ble Union Minister for Commerce & Industry on 7th April 2006.

As members are aware, one of the important announcements made in Annual Supplement of FTP relates to introduction of new schemes called “Focus Products Scheme” to provide incentives to export of products which included value added leather products, having high employment potential in rural & semi-urban areas.

The salient features of the ‘Focus Product Scheme’ as notified in the Foreign Trade Policy as well as Handbook of Procedures Vol-I are given in the Annexure I.

Basically, the Focus Product Scheme allows duty credit facility @2.5% of the export FOB value to the fifty percent of export turn-over of notified products. The DGFT has now notified the eligible products for availing such duty credit facility in respect of export made from 1st April 2006.

The list of value added leather products and leather footwear notified in Appendix 37D of the Handbook of procedures Vol- I vide DGFT Public Notice No 13 (RE 2006) / 2004-09 dated 25th May 2006 is enclosed at Annexure II

It covers almost all items of leather articles falling under ITC(HS) Chapter No.42 and all categories of leather footwear and footwear components including uppers falling under ITC(HS) Chapter No.64

Kindly note that in the list of eligible products specific ITC(HS) Classification Numbers are notified at different digit levels which need to be properly mentioned in the export shipping documents in order to avail the duty credit facility on such items

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For certain item ITC(HS) code Nos. are notified at 4 digit level For example ;

4203 – Articles of apparels and clothing accessories of leather or of Composition leather

6403 - Footwear with outer soles of rubber, plastics, leather / composition leather & uppers of leather

Under these 4 digit codes various items are covered at 8 digit level and all such items are eligible for duty free credit. For example under ITC(HS) codes 4203, the following items are covered:

Therefore, in the Export Shipping documents of these different items, the related ITC(HS) code may be mentioned so that the duty credit facility can be availed accordingly 

As per the Handbook of procedures, application for availing the duty credit facility on these eligible focus products can be submitted on half yearly basis i.e. for April 2006 to Sept 2006 and Oct 2006 to March 2007. Therefore exporters can make their first application after 1st Oct 2006, based on the shipments made during April 2006 to Sept 2006. 

The format of the “Application for Focus Product Scheme” will be Section XB of the Aayaat-Niryaat Form which will be shortly notified in the DGFT website www.dgft.delhi.nic.in. The time limit for submitting the application is 6 months after the last shipment made in a particular period. 

It may be mentioned here that “Focus Markets” have not been notified yet by the DGFT. Moreover, exporters can avail duty credit facility either under Focus Product Scheme or under Focus Market Scheme. Both the schemes can not be availed by one exporter

Member-exporters are requested to kindly note the above and also go through the salient features of Focus Product Scheme and avail the facility accordingly.

Thanking you,
Yours faithfully,

K Abdul Sattar Khan
Asst Director

NB: Kindly note that in terms of DGFT Notification No.57(RE-2005)/2004-09 dated 31st March 2006, the Target Plus Scheme Stands abolished for exports from 1.4.2006