Rules 13 and 14 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Rule 13 says imported goods allotted by the State Trading Corporation of India or another recognised agency must be used only in the manner and for the purpose declared, and goods imported against a licence must not be disposed of except on the licence's terms. Rule 14 bars making, signing or using a declaration, statement or document known or believed to be false in a material particular to obtain a licence or import goods, and bars any corrupt or fraudulent practice. The 2015 Amendment Rules extended both rules to services and technology and to certificates, scrips and other instruments, and substituted rule 13(2). This article explains both rules as per the Rules as notified in 1993 read with the 2015 Amendment Rules.
Rule 13(1): goods or services or technology allotted by the State Trading Corporation or another recognised agency must be used only as declared in the application. Rule 13(2): goods imported against a licence, certificate, scrip or instrument must be disposed of only in accordance with its terms and conditions. Rule 14(1): no one may make, sign or use a false declaration or document knowing or having reason to believe it is false in any material particular. Rule 14(2): no corrupt or fraudulent practice to obtain a licence or to import or export.
What changed in 2015
For rule 13 the 2015 Amendment Rules (G.S.R. 300(E), 17 April 2015) substituted the heading, which is now "Utilisation of imported goods or services or technology", added "or services or technology" to sub-rule (1), and substituted sub-rule (2). For rule 14 they replaced "licence" with "licence, certificate, scrip or any instrument bestowing financial or fiscal benefits" and "any goods" with "any goods or services or technology or goods connected with such services or technology", at both places in sub-rules (1) and (2).
Rule 13(1): use as declared
Rule 13(1) reads: "No person shall use any imported goods allotted to him by the State Trading Corporation of India or any other agency recognised by the Central Government in a manner and for the purpose, otherwise than as declared by him in his application for such allotment or in any document submitted by him in support of such application."
After 2015 the words "goods or services or technology" stand in place of "goods".
If your imports are made under a scheme with use or export conditions, for example as an export-oriented unit, an EOU registration adviser can help you understand how such conditions apply. In plain terms, a person who receives imported goods through such a recognised agency states in the application how and for what the goods will be used. Rule 13(1) bars using them differently. The test is what was declared in the application or in the supporting documents.
| Element | Meaning |
|---|---|
| "allotted to him by the State Trading Corporation of India or any other agency recognised by the Central Government" | The rule applies to goods received through such an agency, not to every import |
| "otherwise than as declared" | The measure of compliance is the person's own declaration |
| "application for such allotment or ... document submitted in support" | Both the application and the papers count |
The rule gives no penalty itself. A breach can lead to confiscation under rule 17(1)(b), which speaks of a condition "relating to their utilisation or distribution, subject to which they were received from or through, an agency recognised by the Central Government". See rules 17 and 18.
Rule 13(2): disposal of goods imported against a licence
Rule 13(2), as substituted in 2015: "No person shall dispose of any good or goods connected with services or technology imported by him against a licence, certificate, scrip or any instrument bestowing financial or fiscal benefits except in accordance with the terms and conditions of such licence, certificate, scrip or any instrument bestowing financial or fiscal benefits."
Printing slip: "any good" is printed in the singular, apparently for "any goods". It is flagged only.
In 1993 the sub-rule read: "No person shall dispose of any goods imported by him against a licence except in accordance with the terms and conditions of such licence." The 2015 text widens the instrument and names goods connected with services or technology.
Reading it:
- It restricts disposal, which includes sale or other transfer. The rule does not define the word.
- The measure is "the terms and conditions of such licence", certificate, scrip or instrument. What those terms are depends on the document and the Policy; see rule 6 for conditions the Rules deem to attach to a licence.
- It applies to the importer ("imported by him"), against a licence or like instrument.
Example: Birch Industries (an invented firm) imports machinery against an authorisation with an actual user condition and later wants to sell a machine it no longer needs. Rule 13(2) bars disposal except in accordance with the authorisation's terms, so Birch reads them first.
Rule 14: false declarations and corrupt practice
Rule 14(1)
Rule 14 carries the heading "Prohibition regarding making, signing of any declaration, statement or documents". Rule 14(1) reads: "No person shall make, sign or use or cause to be made signed or used any declaration, statement or document for the purposes of obtaining a licence or importing any goods knowing or having reason to believe that such declaration, statement or document is false in any material particular." The square brackets show the 2015 additions.
The prohibition covers making, signing or using (or causing to be made, signed or used) a declaration, statement or document for two purposes: obtaining a licence (or certificate, scrip or instrument) and importing goods (or services or technology). The state of mind is "knowing or having reason to believe" that the paper is false, and the falsehood must be in a "material particular". Innocent error is not within the words; knowledge or reason to believe is.
Rule 14(2)
"No person shall employ any corrupt or fraudulent practice for the purposes of obtaining any licence or importing or exporting any goods ." Sub-rule (2) is wider in one respect: it covers exporting as well as importing, and it does not require knowledge of a false paper. Any "corrupt or fraudulent practice" for those purposes is barred. The Rules do not define either term.
How rule 14 links to the Act and other rules
| Provision | Link |
|---|---|
| Section 11(3) of the Act | Penalty where a person signs or uses a declaration, statement or document submitted to the Director General or an authorised officer, knowing or having reason to believe it is "forged or tampered with or false in any material particular"; the 2010 text prints "not less than ten thousand rupees or more than five times the value of the goods or services or technology ... whichever is more" |
| Rule 7(1)(c), (i) | Refusal of a licence for a false statement or a corrupt or fraudulent practice |
| Rule 10(a) | Cancellation of a licence obtained by fraud, suppression of facts or misrepresentation |
| Rule 16 | Settlement where a person has admitted the contravention |
Printing slip: section 11(3) as printed in the 2010 Amendment Act says "not less than ten thousand rupees or more than five times", where section 11(2) says "and not more than five times". The words are quoted as printed. See our article on section 11(1) to (4), rule 7 and rules 8 and 10.
Rule 14 states no penalty of its own. The consequences come from section 11, from refusal or cancellation of the licence, and from confiscation under rule 17.
Rule 14 should be read with rule 11, which requires a declaration of truth at the foot of the Bill of Entry or Shipping Bill. See rules 11 and 12. For the policy side of use and disposal, FTP 2023, para 2.09, and HBP 2023, para 2.46 (both in the copy consulted), deal with the Actual User condition and transfer of imported goods; check the current texts.
Need help with conditions on imported goods?
If your imports are subject to use or disposal conditions, or you need to check a declaration before it is signed, our EOU registration service can help you understand the conditions that apply to export-oriented units and similar schemes. Later amendments to the Act, the Rules and the Policy should be checked.
Key takeaways
- Rule 13(1) bars using goods allotted by the State Trading Corporation or a recognised agency otherwise than as declared in the application.
- Rule 13(2), substituted in 2015, bars disposal of goods imported against a licence, certificate, scrip or instrument except in accordance with its terms and conditions.
- Rule 14(1) bars making, signing or using a declaration, statement or document known or believed to be false in a material particular, to obtain a licence or import.
- Rule 14(2) bars any corrupt or fraudulent practice to obtain a licence or to import or export.
- The 2015 Rules extended both rules to services, technology and wider instruments.
- Consequences follow from section 11, refusal or cancellation of a licence, and confiscation.
Read next
- Rules 11 and 12: declarations of value, quality and IEC
- Rule 6: conditions of licence
- Rule 16: settlement of contraventions
- EOU: export-oriented unit scheme and benefits
Disclaimer: Based on the Foreign Trade (Development and Regulation) Act, 1992 as enacted read with the Amendment Act of 2010, and on the Foreign Trade (Regulation) Rules, 1993 as notified read with the Amendment Rules of 2015, as consulted on 2 October 2026. Later amendments, the current Foreign Trade Policy and the Handbook of Procedures should be checked. This article is general information, not legal advice; check the official text before acting.