Alerts & Updates 1st Dec 2022

SCOMET Update: Amendment to Appendix 3 [List of SCOMET Items] to Schedule- 2 of ITC (HS) Classification of Export and Import Items, 2018

Authors

Sanjay Notani Partner | Mumbai
Ambarish Sathianathan Partner | Mumbai

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SCOMET Update: Amendment to Appendix 3 [List of SCOMET Items] to Schedule- 2 of ITC (HS) Classification of Export and Import Items, 2018

  • Background

    The Government of India maintains a list of SCOMET items i.e., dual-use items having the potential for both civil application as well as weapons of mass destruction. Currently, the said list organizes the SCOMET items under eight (8) categories. The export of these items is permitted only against export authorization unless the export of the concerned item is prohibited or permitted subject to fulfilling certain conditions.

    On November 30, 2022, the Government of India vide notification no. 46/2015-20 issued an updated list of SCOMET items (Updated list of SCOMET items) i.e., Updated Appendix 3 [List of SCOMET Items] to Schedule-2 of ITC (HS) Classification of Export and Import Items, 2018. The relevant notification is available here.

  • Scope of Amendment

    The Government of India through the above notification has expanded the scope of SCOMET items falling under the Category 6: Munitions List and Category 8: Special Materials and Related Equipment, Material Processing, Electronics, Computers, Telecommunications, Information Security, Sensors and Lasers, Navigation and Avionics, Marine, Aerospace and Propulsion. An indicative list of the same is provided below.

    Category Sub-category Name of the SCOMET item included post-amendment
    Category 6 6A001 Gun mountings i.e., Accessories designed for arms specified by 6A001.a 6A001.b, or 6A001.c
    Category 6 6A013 Helmets and specially designed components and accessories thereof, as follows:

    1. Helmets manufactured according to military standards or specifications, or comparable national standards.

    2. Shells, liners, or comfort pads, specially designed for helmets specified in 6A013.c.1.

    3. Add-on ballistic protection elements, specially designed for helmets specified in 6A013.c.1.

    Category 8 8C106 Lubricating materials containing, as their principal ingredients, phenylene or alkylphenylene ethers or thioethers, or their mixtures, containing more than two ether or thio-ether functions or mixtures thereof.
    Category 8 ANNEX-A (Refer 8A108)

    LIST – “EXPLOSIVES”

    EDNA (Ethylenedinitramine) (CAS 505-71-5) and

    TKX-50 (Dihydroxylammonium 5,5′-bistetrazole-1,1′-diolate).

    Category 8 8A301 b. “Frequency synthesiser’ “electronic assemblies” having a “frequency switching time” less than 100 µs for any frequency change exceeding 5.0 GHz within the synthesised frequency range exceeding 75 GHz but not exceeding 90 GHz.
    Category 8 8A301 e. High energy devices as follows: ‘Cells’ as follows: a. ‘Primary cells’ having any of the following at 20°C: 1. ‘Energy density’ exceeding 550 Wh/kg and a ‘continuous power density’ exceeding 50 W/kg; or

    2. ‘Energy density’ exceeding 50 Wh/kg and a ‘continuous power density’ exceeding 350 W/kg; b. ‘Secondary cells’ having an ‘energy density’ exceeding 350Wh/kg at 20°C.

    Category 8 8A302 d. Signal generators having less than 100 µs for any frequency change exceeding 5.0 GHz within the frequency range exceeding 75 GHz but not exceeding 90 GHz.
    Category 8 8A302 d. An ‘RF modulation bandwidth’ of digital baseband signals as specified by exceeding 5.0 GHz within the frequency range exceeding 75 GHz but not exceeding 90 GHz.
    Category 8 8C301 Hetero-epitaxial materials consisting of a “substrate” having stacked epitaxially grown multiple layers of Gallium Oxide (Ga2O3) or Diamond.
    Category 8 8C305 High resistivity materials including gallium oxide (Ga2O3) or diamond
    Category 8 8C306 Materials, not specified by 8C301, consisting of a “substrate” specified by 8C305 with at least one epitaxial layer of gallium oxide (Ga2O3) or diamond (among others).
    Category 8 8D306 ‘Electronic Computer-Aided Design’ (‘ECAD’) “software” specially designed for the “development” of integrated circuits having any “Gate-All-Around Field-Effect Transistor” (“GAAFET”) structure, and having any of the following: a. Specially designed for implementing ‘Register Transfer Level’ (‘RTL’) to ‘Geometrical Database Standard II’ (‘GDSII’) or equivalent standard; or b. Specially designed for optimisation of power or timing rules. Technical Notes

    1. ‘Electronic Computer-Aided Design’ (‘ECAD’) is a category of “software” tools used for designing, analysing, optimising, and validating the performance of integrated circuit or printed circuit board. 2. ‘Register Transfer Level’ (‘RTL’) is a design abstraction which models a synchronous digital circuit in terms of the flow of digital signals between hardware registers, and the logical operations performed on those signals. 3. ‘Geometrical Database Standard II’ (‘GDSII’) is a database file format for data exchange of integrated circuit or integrated circuit layout artwork.

    Category 8 8E303 Other “technology” for the “development” or “production” of substrates of diamond for electronic components; and substrates of gallium oxide for electronic components.
    Category 8 8A605 d “Chemical lasers” as follows:

    a. Hydrogen Fluoride (HF) “lasers”; b. Deuterium Fluoride (DF) “lasers”.

    Category 8 8D603 h. Air Traffic Control (ATC) “software” designed to be hosted on general purpose computers located at Air Traffic Control centres and capable of accepting radar target data from more than four primary radars.
    Category 8 8A904 g. “Aircraft” specially designed or modified to be air-launch platforms for “suborbital craft”.
    Category 8 8B901 Manufacturing equipment, tooling or fixtures as follows: Directional-solidification or single-crystal additive-manufacturing equipment designed for “superalloys”.
    Category 8 8E903 “Technology” “required” for the “development” or “production” of any of the following gas turbine engine components or systems: Combustors having Utilising ‘pressure gain combustion’.
    Category 8 8E903 a. Aerofoil-to-disk blade combinations using solid state joining.

    In addition to the above, certain clarificatory amendments have also been made to the list of SCOMET items.

  • For further details on the changes made vide the aforementioned notification, please see the Updated list of SCOMET items, which is available here.

    NEXT STEPS:
    To provide transition time to the relevant businesses, the changes made to the list of SCOMET items under the aforementioned notification are effective from 30 December 2022 i.e., 30 days after the issuance of the notification dated 30 November 2022. To obtain export authorization to export the SCOMET items under the Updated list of SCOMET items from 30 December 2022, the exporters would need to submit an application in the prescribed format to the Directorate General of Foreign Trade (DGFT). The procedure to file the said application is laid down under the Foreign Trade Procedure, which is available here.
  • We trust you will find this an interesting read. For any queries or comments on this update, please feel free to contact us at insights@elp-in.com or write to our authors:

    Sanjay Notani, Partner – SanjayNotani@elp-in.com
    Ambarish Sathianathan, Partner – AmbarishSathianathan@elp-in.com
    Harika Bakaraju, Principal Associate – HarikaBakaraju@elp-in.com

Disclaimer: The information contained in this document is intended for informational purposes only and does not constitute legal opinion or advice. This document is not intended to address the circumstances of any individual or corporate body. Readers should not act on the information provided herein without appropriate professional advice after a thorough examination of the facts and circumstances of a situation. There can be no assurance that the judicial/quasi-judicial authorities may not take a position contrary to the views mentioned herein