If the imported raw nuts are to be used for further export after processing, the best scheme is Advance Authorization Scheme. Despite this scheme disallows Drawback of 1% Rate, kernel exporters can import their requirements under duty free basis. But they have to follow export obligations both in terms of quantity and amount –
Under Duty Free Import Scheme, 4 kilo raw cashew is permitted duty free against the export of 1 kilo cashew kernel. However, the FOB value of kernel exports should include at-least 15% value addition on the CIF value of imports.
large scale exporters can avail this Nil Duty benefit without much difficulty.
Medium scale exporters will have to purchase cashew kernel from domestic sellers to make up the production shortfall for the 4 : 1 tally. Such purchases should be allowed, otherwise they will land in huge trouble.
For slight differences to this tally, exporters have an option under No-Norms category. Import and Export can take place after the Norms fixation. If the Norms fixed permit a lower input quantity, appropriate customs duty has to be paid for the difference.