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SCOMET Items Export Legalities: A Complete Overview

calendar22 Mar, 2022
timeReading Time: 5 Minutes
SCOMET items

SCOMET is an abbreviation for Special Chemicals, Organisms, Materials, Equipment, and Technologies. SCOMET products are dual-use items that can be utilized for civilians as well as military applications. India’s FTP governs the exportation of items failing under the SCOMET list. The exporter is required to secure a license from DGFT, i.e. Directorate General of Foreign Trade, to ship SCOMET items abroad.

SCOMET Items Categories

Below are the eight categories of SCOMET products:

Category 0: Nuclear material, technology, equipment, & nuclear-related other materials

Category 1: Toxic chemical agent as well as other chemicals.

Category 2: Micro-organism & toxin.

Category 3: Material, Materials Processing machines, & other material related technologies.

Category 4: Nuclear-related machines or equipment test & production oriented equipment; assemblies & components of nuclear; & related technology, not controlled under Category 0.

Category 5: Aerospace system, equipment plus productions & test types of equipment, allied technology & specially designed component.

Category 6: Munitions List

Category 7: Electronic, Computers, and IT, including information security.

Category 8: Special Materials as well as Related Types of equipment, Computers, Electronics, Information Security, Material Processing, Telecommunications and Lasers, Sensors, Marine, Avionics, Aerospace Navigation and Propulsion.

Note: Each category entails a comprehensive list of items encompassed and special conditions are also covering each category.

The comprehensive detail of SCOMET items is covered under Appendix 3 of Schedule 2 of ITC (HS) & visit the DGFT portal to get more information on the SCOMET items.

Authorization for exporting SCOMET items

Every registered exporter needs to submit a prescribed application for the grant of Export Authorization to the online portal of DGFT.

Export of SCOMET items for Exhibition

License for exporting such items (except those enlisted under Category 0,1 and 2) solely for Exhibition or display will not require any end-user certifications or endues. The export license shall not be granted for the Exhibition of ‘Technology’ in any items enlisted in Categories 0, 1, and 2

License for exporting such products for Exhibition abroad is subject to a requirement of re-import within six months. The traders are required to apply for an export license in case the exhibitor wishes to sell the item during the Exhibition abroad.

Such a sale of SCOMET items cannot come to effect without a valid license.

Export of SCOMET Items from DTA to SEZ

The said items can supply from DTA, i.e. Domestic Tariff Area to SEZ, i.e. Special economic zone, without authorization. But, the suppliers are required to disclose all supplies of SCOMET items from DTA to SPZ to the Development Commissioner of the concerned SEZ.

Exporting of SCOMET products via SEZ to any Other Country

Export authorization serves as a mandate for exporting of SCOMET products from SEZ to another nation

An Overview on Licensing Authority

  • Directorate General of Foreign Trade, i.e. DGST grants license for exporting items cited under Categories 1, 2, 3, 4, 5, 7 & 8 of the SCOMET list.
  • Department of Atomic Energy serves as a prime authority for granting licenses for items enlisted in Category 0
  • Department of Defence Production acts as frontline authority for granting permission to export items covered under Category 6 of the SCOMET list.

SCOMET Export License Validity

24 months is the max validity of the export license. However, it can be further extended for six months and max upto one year via a revalidation process conducted by the DGFT regional office

Mandatory documentation required for securing a license for exporting SCOMET Items

Following are the mandatory documentation that one needs to upload while making an application for SCOMET Authorization:

End Use-cum-End User Certificate (EUC) from all the entities engaged with the supply of the items (the applicant must provide EUC on the letterhead enclosing the signature of the authorized signatory)

  • Purchase orders relating to the supply chain of the products
  • Aayat Niryat Form (ANF)-1
  • Detailed technical specs regarding said item of export
  • Supply contract document (In case of massive paperwork, the relevant portion comprising the contract reference and parties engaged with the contract can be provided)
  • DGFT authorization letter relating to the SCOMET items.
  • The physical copy of the underneath documentations must be submitted to the DGFT Head Quarters:
  • End Use-cum-End User Certificate (EUC) (True Copy)
  • Bills of Entry into the destination nation for SCOMET items shipped during the last one year.

Specified format relating to the End User Certificate (EUC)

Depending on the product’s type and the authorization, the exporter should use a specific format of EUC as mentioned in the Handbook of Procedures.

  • Appendix- 2S (i) – For exporting SCOMET items covered under Categories 2,3,4,5,7, and 8
  • Appendix- 2S (ii) – for applying a Specific SCOMET authorization for the shipping SCOMET items enlisted Category 1
  • Appendix- 2S (iii) – to apply for ‘Stock and Sale’ SCOMET authorization for the exportation of all SCOMET items
  • End-user Certificate from the overseas buyer, if different from the End User.
  • End-User Certificate from the Consignee, if different from the end-user and overseas buyer
  • End-User Certificate, i.e. EUC from the Other intermediaries, if any
  • EUC from overseas buyers, Consignee & End User should showcase the logical flow of items.

Step by Step Application Procedure

  1. Visit the DGFT portal and complete the login formalities.
  2. From the service tab, select the ECOM option.
  3. On the new page, i.e. ECOM application module, select the SCOMET Application Module.
  4. Wait for a message box to appear on the screen. The message box shall reflect the 20 digit ECOM Reference number.
  5. Click Ok to proceed further.
  6. Provide the Business details, shipping detail, purpose of export, etc.
  7. Opt for the respective Jurisdictional Regional Authority via the dropdown box.
  8. In the itemitem of the Export section, fill out the detail of the SCOMET category, ITC (HS) code, SCOMET Item Number, item description.

Note: In case the exportation Repeat Basis in the same year for the same itemitem, the same end-use has been already applied, then put the checkmark in the repeated basis checkbox and render the file number along with license number, quantity permissible for exportation and number of items exported. After submitting aforesaid details, the applicant needs to render the detail of the overseas buyer and consignee:

  1. Next, provide the Bank Details, Bank address of the destination Country, Account number of the International Bank, the SWIFT Code, and the IFSC Code.
  2. After submitting such details, exporters need to click on the declaration tab and fill out detail like Name, Official Address, and Telephone details.
  3. Next, submit the documentation as mentioned above.

After application submission, the processing phase initiates under which Inter-Ministerial Working Group (IMWG) will consider all requests for the exportation of SCOMET items on merits.

Factors to be considered during application’s evaluation

The given factors shall be taken into account for the application’s evaluation.

  • End-user’s credentials, the credibility of declarations regarding the proposed use of the itemitem, integrity of the supply of SCOMET item via supplier to end-user, and the purpose of itemitem or technology
  • The assessed risk that exportable products shall fall into the hands of terrorist groups, and non-State actor
  • Control measures relating to export instituted by recipient State
  • The objectives and capabilities of programs of recipient State regarding weapons and the delivery
  • Assessment of end-users of item
  • Applicability to the export license application of the concerned agreement to which India serves as a party

Grant of License

Once the Inter-Ministerial Working Group approves the request, a consent letter shall be granted to the applicant to secure SCOMET export authorization from the respective DGFT’s office[1].

Conclusion

SCOMET export authorization serves as a mandatory requirement for every exporter intending to ship SCOMET products outside India. As you can see, the legalities around the export of SCOMET items are pretty complex and tedious. Thus, it is advisable to get in touch with a subject matter expert or a professional firm like Corpbiz to address these legalities.

Read our Article:RoDTEP Scheme: Everything You Needs to Know

Pankaj Tyagi

Pankaj has a diverse experience of writing research papers, blog, and articles during his college time. Earlier, he was working as a tax consultant in a financial firm, but his interest in writing drives him to pursue a career in the writing field.

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