Customs nod must for duty-free shops

NEW DELHI: The finance ministry has clarified that companies planning duty-free shops in the country will need to take a separate clearance from local Customs authorities, once their plan is cleared by the Foreign Investment Promotion Board (FIPB).

The FIPB���s approval is only for the purpose of permitting foreign investment and any such approval does not automatically confer a right on the applicant to open a duty-free shop at any port, an official said. Requisite clearances from the Customs authorities as envisaged in the Customs Act, 1962 are mandatory, the official said.

At present, duty-free shops can only be set up in Customs areas and the Central Board of Excise and Customs has laid down guidelines for it. The board has asked field officials to ensure proper implementation of the conditions, restrictions and guidelines before a licence is granted for setting up a duty-free shop. This would be applicable even in cases where FIPB has given its go-ahead to the proposal.

The official said FIPB considers many proposals for bringing in FDI which are considered in totality. The recommendation of FIPB in respect of these proposals is only for foreign financial and technical collaboration and keeping in view the sectoral policy requirements.