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FIEO offers you an opportunity for Online Chat every Wednesday between 3 to 5 pm (IST) with Mr. Ajay Sahai, Director General (FIEO) on issues related with foreign trade. Mr. Sahai has served many important offices in various capacitites. As Jt. DGFT (Policy), during 1996-2003, he was closely associated with the formulation of the Exim Policy. Feel free to seek clarifications/advices from Mr. Sahai on issues related with foreign trade. All that you need to do is to just click ‘FIEO On-Line Chat Service’ at www.fieo.org. Some portions of the Chats held last weeks are reproduced here. |
We would like to know about Leather Park scheme which has been recently announced.
The Government is proposing to set up three leather industry parks in the country – one each at Irungattukotai and Chennai in Tamil Nadu and one at Kolkata in West Bengal. The objective of the scheme is to provide basic and essential common infrastructure like design studios, common facility centre, display-cum-warehousing facilities for housing large manufacturing units which would inter-alia provide employment to large number of people.
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Para 3.2.2 of the Handbook of Procedures says "that all Status Certificates shall lapse on 31.03.2009." This has been amended by Public notice No 40 dated 30 Aug 2007 which says "All Status Certificates shall be valid for a period of 5 years reckoned from the 1st April of the relevant year. All Status Certificates valid beyond 31.3.2009 shall continue to remain in force, in case provisions of Foreign Trade Policy 2009-14 continue to recognize the status." Public Notice 40 gives the impression that our Status Certificate will NOT lapse on 31.03.2009, since our 5 years will be over only on 31.03.2011, as the date of issue of the Status certificate is 2006. If that is the case, do we have to send our Status Certificate to DGFT for renewal to show validity till 2011 instead of 2009?
There is no need to send the certificate for renewal till expiry of 5 year period which in your case will be 31st March 2011.
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What are the concessions announced by the Government to provide relief to exporters in the wake of appreciation of Indian Rupee?
Government has announced packages from time to time to restore competitiveness of exports hit by strengthening of the currency. These include:
July 2007 Package:
(i) Government decided to provide subvention in the rate of interest on these credits by 2% on the outstanding balances for the period 1.4.2007 to 31.12.2007 for the following sectors:
A.(i)Textiles (including handlooms); (ii)Readymade Garments; (iii)Leather Products; (iv) Handicrafts; (v)Engineering Products; (vi); Processed Agricultural; Products; (vii)Marine Products; (viii)Sports Goods; (ix)Toys
B. All exporters from the SME sector.
(ii) Upward revision of duty drawback/DEPB rates.
(iii) Service Tax (refund/exemption) for exports in respect of four services: (a) port services; (b) transport of goods; (c) transport by railways; and (iv) other port services.
October 2007 Package:
(i) Service Tax (refund/exemption) for exports in respect of three more services: (a) general insurance; (b) technical testing and analysis; and (c) technical inspection and certification.
(ii) Provision to pay interest on EEFC accounts of exporters on outstanding balances subject a maximum of US$ 1 million valid up to 31.10.2008.
(iii) The period for interest subvention on pre-shipment and post-shipment credit extended from 31.12.2007 to 31.3. 2008.
(iv) Four more sectors: (a) jute and carpets, (b) cashew, coffee and tea, (c) solvent extraction and de-oiled cake, and (d) plastics and linoleum, added to the list of export sectors eligible for interest subvention under pre-shipment and post-shipment credit.
(v) The coverage under Vishesh Krishi and Gram Udyog Yojana (VKGUY), a scheme aimed at promoting export of agriculture and village industry products, was expanded to include additional products and the budget allocation was doubled from Rs.300 crores to Rs.600 crores.
November 2007 Package
(i) Additional subvention of 2% (in addition to the 2% already offered earlier) in pre-shipment and post-shipment credit to the following sectors: a) Leather and Leather manufacturers b) Marine products c) All categories of textiles under the existing scheme including RMG and carpets but excluding man-made fibre d) Handicrafts
The total subvention will be subject to the condition that the interest rate, after subvention, will not fall below 7%. Period of validity: 01/11/2007 to 31/3/2008.Term of credit: 180 days for pre-shipment and 90 days for post-shipment, excepting the carpet sector for which the term would be 270 days for pre-shipment and 90 days (like other sectors) for post-shipment.
(ii) Service tax will be exempted for exporters under three new services: a) Storage and Warehousing services b) Specialised cleaning services (Fumigation and disinfection) c) Business exhibition services
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Please let me know about Merchanting Trade?
Trade between two foreign entities operated by an Indian trader is described as ‘merchanting trade transaction’. In such transactions, it is not necessary to physically import the goods into the country and then re-export the same.
We are merchant exporters and our export turnover exceeded Rs.7.5 Crore in the previous year. Can we avail benefit of import under advance authorisation without executing Bank Guarantee?
In case you are a regular exporter for the last three years and your export in the preceding year on FOB basis is Rs 5 Crore or more and you have a good track record, then you can furnish Bond instead of Bank Guarantee in terms of Custom Circular 58/2004 dated 21.10.04.
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Export of cotton Durries has been allowed the benefit of Focus Market Scheme. Can you provide us its details or suggest any source?
Focus Market scheme covers all products (barring those specifically excluded from its purview) exported to notified Focus countries and Cotton Durries are covered under it. These Durries (ITC HS Code 57050021) have now been covered also under Focus Product scheme vide DGFT Public Notice No. 58 dated 3rd OCT, 2007.
Will the benefit accrue from 3rd Oct 2007 or from 1st April 2007?
As per the above Public Notice, the benefit will available for exports from 1.4.2006 onwards including exports during current year.
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Our unit seeks to make our supporting manufacturer as a co-licensee for imports under DFEC scheme for Status Holders. Can we get such an endorsement?
The facility of co-licensee was subsequently extended under Target Plus scheme but it is not available under DFEC Scheme and therefore licensing authority may not endorse it. It is advisable to make a special request to DGFT (HQ) giving detailed justification.
Can we apply for EPCG License for importation of spares only? If yes, what would be the export obligation? Will it be only 8 times the duty saved? Or, do we have to maintain last 3 year’s average exports also?
You can apply for EPCG licence for import of spares exclusively at concessional duty of 5%. In such case, you will be required to undertake an export obligation equivalent to 8 times the duty saved in addition to average level of exports maintained by you in preceding three licensing years.
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Our unit is solely manufacturing leather goods which are non-excisable. We exported these goods under DFIA during 2006-07 but recently got transferability where licensing authority has put condition of payment of additional customs duty which was not in the licence. How can we get refund of this duty?
DGFT has issued Notification. No. 49 (RE-2007) dated 14th November 2007, modifying paragraph 4.4.6 as follows: "Once transferability is endorsed, imports/domestic procurement against authorisation or transfer of imported inputs/domestically procured inputs shall be subject to payment of applicable additional customs duty/excise duty. While endorsing transferability, authorisation would bear a note as to liability of such additional customs duty/excise duty. However, in case where CENVAT facility has not been availed, exemption from additional customs duty/excise duty would be available even after endorsement of transferability on DFIA." In view of this, you may ask the licensing authority to cancel the endorsement of payment of additional customs duty as you have not availed CENVAT facility.
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Our Drawback claim for enhanced rate has not been released. Customs authority at the port tells us that it has not received any instruction in this regard. What should we do?
CIRCULAR NO.39 /2007-CUS, dated 9th Oct, 2007 has already been issued for dealing with the cases of increase in drawback rates with retrospective effect from 1.4.2007. Accordingly, the differential drawback amount which has become due to the exporters against exports effected through EDI during this period may be paid to them without their having to file supplementary claims. The Directorate General of Systems has been requested to provide suitable software to all EDI locations which will ensure that the differential amount of drawback gets automatically processed and credited to the exporters’ accounts doing away the need for filing supplementary claims by exporters individually. However, in case of manual shipping bills, the exporters shall be required to file supplementary claims as required under Rule 15 of the Customs, Central Excise Duties and Service Tax Drawback Rules, 1995.
