Stock and Sale

The provision of stock and sale for SCOMET items was introduced through Public Notice 60 dated 3rd February 2016. It allows the principal company/wholly owned subsidiary to stock items in the subsidiary/parent company/warehouse abroad on the basis of an End user certificate submitted by the latter for 'stock and sale' purpose.

The license is given after taking into account security and other strategic characteristics. Now 2 cases arise with respect to the items stocked abroad:-

a) When items are transferred to any entity  in the same country as they are stocked.

In this case the IMWG has the power to relax the condition for prior permission before transfer of such goods to any entity. However, the end use certificates from all links in the supply chain has to be submitted to DGFT.

b) When items are transferred to any entity  in any other country

In cases of retransfer of items by the stockist entity to any entity outside the country, EUCs from all links in the supply chain have to be submitted to DGFT and prior permission received before the transfer.

This provision facilitates bulk transfer to the stockist entity, thereby substantially reducing the transaction cost and time. Moreover, if transfers are to be made in the same country and prior permission is not required, the transfers can be made on Just-in-time basis thereby increasing the efficiency in the supply chain.

 

SCOMET List

The comprehensive SCOMET list may be downloaded from https://goo.gl/1JpxAm


This document compiles all the changes till 31st December 2016.

FAQs on applying for SCOMET license

1.       What are dual-use goods and technologies?

Dual-use items are goods, software, technology, chemicals etc. which can be used for both civil and military applications. Such items require a license for exporting out of the country. India’s list of items which need an export license is known as the SCOMET list.

2.       What is the meaning of SCOMET?

SCOMET is an acronym for Special Chemicals, Organisms, Materials, Equipment and Technologies.

3.   Is export of SCOMET items regulated?

Yes, export of items in the SCOMET list is regulated as per India’s Foreign Trade Policy. Export is either prohibited or is permitted under a license.

4.       Where can I find the list of SCOMET items?

Appendix 3 of Schedule 2 of ITC (HS) Classification contains the control list of India which is also referred to as the SCOMET list. You can go to the DGFT website to see the complete list. The link for the same is:

In the list as appearing in Appendix 3 of Schedule 2 of ITC (HS) Classification, SCOMET items are listed under eight (8) categories as follows:

·    Category 0: Nuclear material, nuclear-related other materials, equipment and technology.

·      Category 1: Toxic chemical agents and other chemicals

·      Category 2: Micro-organisms, toxins

·      Category 3: Material, Materials Processing Equipment, and related technologies

·     Category 4: Nuclear-related other equipment, assemblies and components; test and production equipment; and related technology, not controlled under Category 0

·  Category 5: Aerospace systems, equipment including production and test equipment, related technology and specially designed components and accessories thereof.

·      Category 6: (Reserved)

·  Category 7: Electronics, computers, and information technology including information security.

Each category contains exhaustive listing of items covered under that category. Special conditions applicable to items under different categories are mentioned under each category.

5.       How do I apply for a license to export SCOMET items?

Application for grant of Export Authorisation has to be made to DGFT through an online system. Please visit the DGFT website at http://dgft.gov.in. Firstly, you should read the detailed guidelines and get all the required documents before making the application.

6.       What are the documents to be submitted for the application?

The following documents need to be uploaded online while making the application.

(i)   End Use-cum-End User Certificate(s)(EUC) from all the firms/entities involved in the supply chain of the product(s) (to be furnished on their letter head duly signed by the authorised signatory);

(ii) Copy(ies) of Purchase Order(s) of firm(s) involved in the supply chain of the item/product;

(iii)  Aayat Niryat Form (ANF)-1 (Profile of Exporter);

(iv)  Elaborate technical specification relating to item of export;

(v)   Copy(ies) of supply contract/agreement {if documents are bulky only the relevant portion containing contract reference and parties to the contract and the portion indicating the item(s) to be supplied and quantity thereof not exceeding 10 pages shall be uploaded);

(vi) Copy of DGFT authorization letter for the same product, if any in case of repeat application;

Hard copy (Paper copy) of the following documents are required to be submitted to DGFT (HQ):

(i)        Original End Use-cum-End User Certificate (EUC);

    (ii)     Copies of Bills of Entry into the destination country for items exported during         the last one year.

7.       What is the process to obtain the license?

You need to first make an application to DGFT, Headquarters for obtaining the approval for issuance of license.  All applications for licence for export of SCOMET items are considered on case-by-case basis by an Inter-Ministerial Working Group (IMWG) in the DGFT under the Chairmanship of Additional Director General of Foreign Trade as per guidelines and criteria laid down in Para 2.49 of the Handbook of Procedure Vol. 1. Once the case is approved by the IMWG, permission letter is issued to the exporter for obtaining export authorization from the concerned Zonal/Regional office of the DGFT.

8. Is a license required even for export of SCOMET items for display or exhibition purposes?

Yes, a license is required.  Licences for export of items in this list for display or exhibition abroad are subject to a condition of re-import within a period not exceeding six months.

Exporters are entitled to apply for an export licence for such items exhibited abroad if

exhibitor intends to offer that item for sale during exhibition abroad. Such sale shall

not take place without a valid licence. 

The export of items in SCOMET List (other than those under Category 0, 1 and 2) solely for purposes of display or exhibition shall not require any end-use or end-user certification. 

However, no export Authorisation for display or exhibition shall be issued for ‘Technology’ in any category

9.       Do I need a license to supply SCOMET Items from DTA to SEZ?

ü       No export authorisation is required for supply of SCOMET items from DTA to SEZ. However, all supplies of SCOMET items from DTA to SEZ will be reported to the Development Commissioner of the respective SEZ by the supplier.

ü     Export authorisation is, however, required if the SCOMET items are to be physically exported outside the country from SEZ i.e. to another country (Refer Rule 26 of the SEZ Rules, 2006).

10.   Do I need a license to supply SCOMET Items from SEZ to any other country?

Export permission is required if the SCOMET items are to be physically exported outside the country from SEZ i.e. to another country (Refer Rule 26 of the SEZ Rules, 2006).

(Inserted vide Notification No.93(RE-2010)/2009-14 dated 6.1.2012)

11.   What is the procedure for Applications for entering into an arrangement or understanding for Site Visits, On-site Verification and Access to Records / Documentation?

An application shall be made in ANF 2P to DGFT (Hqrs.), New Delhi along with documents prescribed therein. These applications shall be considered by an Inter-Ministerial Working Group (IMWG) in DGFT (Hqrs.) for grant of approval.

12.   Do I need an authorization for repeat orders of same product?

Applications for grant of authorisations for repeat orders for export of SCOMET items shall be considered by IMWG on automatic basis. However, only the applications submitted within two years from the date of approval by IMWG of the original SCOMET authorisation will be eligible for repeat authorisation.

It is also subject to other conditions i.e All of the following should be the same i.e. (a) the product along with the technical specification (b) the exporter (c) the foreign buyer (d) the consignee or the intermediaries, if any (e) the end user (f) the end use and (g) the country of destination.

Moreover, the permitted quantity against repeat export authorisations shall not be more than two times of the quantity in original authorisation, subject to the annual manufacturing capacity of the end user in respect of the relevant product, as certified by the end user.

13.   What are the restrictions on export of chemicals as per SCOMET list?

Category 1 (of SCOMET List) Chemicals : Exporters must go through the

provisions very carefully before undertaking to export chemicals under Category 1.

Export of Category 1A chemical is prohibited. The list of State Parties to the

Chemicals Weapons Convention (CWC) and countries which are not State Parties is

available on the OPCW website http://www.opcw.org.

14.   Can I get an advance authorization where the export item is a SCOMET item?

15.   Can I get export permission for “stock and sale” purpose?

Yes, but Export shall be permitted only from the principal company/the wholly owned subsidiary in India to their subsidiaries/principal company/warehouse abroad on the basis of an EUC from the latter for ‘stock & sale’ purposes, when considered appropriate from the point of view of security and other critical consideration.

16.   What is the requirement for export for spare parts for SCOMET items?

Request for export permission for spare parts covered under SCOMET may be considered by IMWG along with the application for the main item/ equipment.  Applicant may indicate the requirement of spares after judicious and reasonable assessment thereof, and provide the justification for the same.

17.   Is there is a validity period of the license? Can it be extended?

Yes, there is a validity period of the license. It can be extended for six months at a time and maximum upto 12 months through revalidation by DGFT regional office on the approval of DGFT.

18.   Do I need a license for Export of Military Stores?

Not exactly a license But a No Objection Certificate (NOC) from Department of Defence Production is required for Export of Military Stores. 

19. Who gives license for Category 0 items in the SCOMET list?

Licensing authority for items in Category 0 in Appendix 3 to Schedule 2 of ITC (HS) is Department of Atomic Energy. Applicable guidelines are notified by the Department of Atomic Energy under Atomic Energy Act, 1962.  For  certain  items  in  Category  0,  formal assurances from the recipient State will include non-use in  any  nuclear  explosive  device.  Authorizations  for export of certain items in Category 0 will not be granted unless transfer is additionally under adequate physical protection and is covered by appropriate International Atomic Energy Agency (IAEA) safeguards, or any other mutually agreed controls on transferred items.

Historical Development of Indian Export Controls

In early 1993, a "Small Group on Strategic Export Controls" was constituted by the GOI to initiate the process of institutionalizing a system of controls over strategic exports from India. The Group finalized a list of items whose export was to be made subject to licensing. This list, described as "Special Materials, Equipment and Technology (SMET)", was notified in the Export Import Policy announced on March 31, 1995, effective April 1, 1995 (Public Notice 68EXP(PN)/92-97).

Separately, but effective from the same fiducial date (i.e. April 1, 1995), the DAE issued gazette notifications, under the Atomic Energy Act, 1962, listing prescribed equipment and prescribed substances, that are subject to export licensing by the DAE.

India's signature to the Chemical Weapons Convention (CWC) in January 1993 required notification of dual-use chemicals contained in the three schedules annexed to the CWC. In a Public Notice, effective 31 March 1993, the Director General of Foreign Trade specified a list of dual-purpose chemicals, the export of which is either prohibited or permitted only under license.

Given the growing importance of biotechnology and advances in recombinant DNA technology, the export of micro-organisms from India was also administered. Pursuant to the Environment Protection Act, 1986, a gazette notification was issued by the Government of India in 1989 on rules for the manufacture, use, import, export and storage of hazardous microorganisms/genetically engineered organisms or cells.

A second Small Group on Strategic Export Controls was set up in 1999 to review the implementation of the existing system and make recommendations for enhancing its effectiveness. Subsequently, through a notification effective April 1, 2000, the Director General of Foreign Trade specified a list of Special Chemicals, Organisms, Materials, Equipment and Technologies (SCOMET), the export of which is either prohibited or permitted only under license. The grant of license inter alia depends upon end-use cum end-user certification. The SCOMET list is now notified in the Foreign Trade Policy in Schedule 2 of the Appendix 3 of the Indian Tariff Classification (Harmonized System) - ITC(HS) Classifications of Export and Import Items.