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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 have two manufac turing units in our company producing the same product. We have imported some inputs for one unit under an advance licence. Can we transfer the input to our other unit?
Transfer of any duty free material imported or procured against advance licence from one unit of the company to another unit of the same company for manufacturing purpose is allowed with the permission of the jurisdictional Excise Authorities with a clear undertaking that no benefit of CENVAT shall be claimed on such transferred inputs. However, this facility could be availed only if all such units are endorsed in the IEC certificate.
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We are a recognised Export House and we export products manufactured/processed by SSI. We are exporting our products as Merchant Exporter. Can we get double weightage as an Export House?
Yes, both merchant and manufacturer exporters are eligible for double weightage.
What documents are required to be submitted to DGFT for us to claim Double Weightage?
Your CA should certify that the products exported by you were manufactured by SSI units after duly satisfying himself and you may be asked to produce the copy of SSI registration certificate of your supplier.'
Is any disclaimer for Double Weightage required from SSI?
No disclaimer is required as status certificate can be claimed by one who realises the foreign exchange. I repeat, both merchant and manufacturer exporter can claim double weightage now provided they realise foreign exchange in their account. Earlier double weightage was only available to SSI manufacturer.
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If I export by courier, then I will have no proof of shipment except a receipt from the courier company. In that case, what document can we submit to the bank as proof of custom clearance?
In case of exports by courier also your goods will undergo custom clearance and thus you will get a clearance certificate from customs.
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Why export to Nepal and Bhutan is not eligible for exemption from excise duty?
Under the Central Excise rules, exports have been defined as exportation to any place outside India except Nepal and Bhutan and therefore excise duty is leviable on exports to Nepal and Bhutan except in some cases.
What are these exceptional cases where we get excise exemption?
Exports made in freely convertible currency provided the importers open an irrevocable Letter of Credit in favour of the Indian exporters; supplies to projects financed by UN agencies, IBRD, IDA, ADB and supplies to Diplomatic Missions are exempted from excise duty in the case of export to Nepal & Bhutan.
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I have exported goods under DFRC which was found defective and therefore re-imported. After repairing the goods, I have re-exported them. Can I get the benefit on such re-exports?
As per Customs Circular No. 29 dated 8.7.2005, you will be eligible for DFRC for 95% of the CIF value from the DGFT on the basis of a certificate issued by Customs Authorities. However, such DFRC shall be valid for a period equivalent to the balance period available in the earlier DFRC on the date of import of such defective goods.
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We want to import a machine from Japan which is 15 year old? What are the current provisions for of second hand capital goods?
Import of second hand goods is freely allowed by an actual user without any age restriction and therefore you can import 15 year old machine.
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Our company wants to export goods to US worth US$ 10,000 without GR declaration, but customs is not allowing the same saying it does not have any clear instruction in this regard?
Export of goods valued not more than US $ 25,000 is exempted from filing GR/PP declaration. The Department of Revenue has issued a Circular (No. 53/2004 dated 13th Oct. 2004) allowing the above facility. You may produce a copy of the Circular to Customs. The Circular is available at www.cbec.gov.in
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We are merchant exporters and the CIF value of our export turnover exceeded Rs.7 Crore in the previous year. Can we avail the import benefit under advance licenses without executing Bank Guarantee?
If you are a regular exporter for the last three years and the FoB value of your export in the preceding year is Rs 5 Crore or more and you have a good track record, then you can execute a Bond instead of furnishing Bank Guarantee as per customs circular no. 58/2004 dated 21.10.04.
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Can
we apply for EPCG License for import of spares exclusively? If yes, then
what would be the Export Obligation? Would it be only 8 times the duty saved
or include average exports for the last three years also?
You can apply for EPCG licence for import of spares in respect of machines
imported under EPCG Scheme at concessional duty, which is 5% now. In such
case you 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. However, at present EPCG licences are not issued for import
of spares in respect of a machine which was not imported under EPCG. FIEO
has taken up this issue of discrimination and we are hopeful that it will be
sorted out shortly.
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I would like to know about EEFC and the interest earned under this account?
EEFC account is a non-interest bearing current account which can be used by exporters to finance their imports as well as to extend trade related loans and advances to overseas importers. Exporters can also repay packing credit advances from their EEFC accounts.
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What is the difference between "Invalidation Letter" (used for getting the supply from indigenous sources against an Advance Authorisation) and "Advance Release Order"(ARO)?
Invalidation letter is normally used when a domestic supplier supplying the intermediate product also wants to import his inputs without paying customs duties. ARO is sought in cases where the domestic supplier wants refund of the duties already paid on the inputs used in the intermediate product. For example, if you are an exporter of shirts and you want fabric from a local manufacturer, the local manufacturer may require duty free import of fibre/yarn which is input for the intermediate product i.e. yarn. In such situation, the local manufacturer will apply for intimation letter. However, if he wants to pay the duty on fibre/yarn and seek its refund later, then he will have to apply for ARO.
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We are a 100% EOU and we want to send the documents directly to our client to avoid high banking cost. Can we send the documents directly to the client ignoring the banks?
Please see paragraph 3.7.2.1 (iii) of Foreign Trade Policy 2004-09. The exemption from compulsory negotiation of documents through banks, provided remittance is en-route through banks, is available to all One, Two, Three, Four and Five Star Export Houses. Other exporters can also send their documents directly to buyer after taking prior permission of the Reserve Bank of India. However, documents in respect of goods exported against 100% advance remittances may be sent by any exporter directly (status as well as non-status holders) to the consignee without routing the documents through banks.
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We are a private limited company and our chairman is also having a proprietary firm. Can we fulfill the export obligation of our company through export from the proprietary firm as a group company?
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Director General: The definition of Group Company applies to companies falling within a group and therefore the benefit cannot be extended to proprietorship or partnership firms.
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I had a proprietorship firm and I had taken IEC for this firm. Now I wish to convert this firm into a partnership firm. Please let me know which documents are required to be submitted with Zonal JDGFT, Mumbai?
For conversion of a firm from proprietorship to partnership, you are required to fill in the form for change of constitution and submit it along with a copy of your partnership deed. Such changes need to be incorporated in the IEC within 90 days from the date of the change from proprietorship to partnership firm.
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How is the Education Cess calculated?
Kindly see the example below.
Landed
value (CIS) - Rs. 1,00,000
Basic Customs Duty @ 20% - Rs. 20,000
Landed Cost - Rs. 120,000/-
CVD @ 16% + 2% Education Cess thereon - Rs. 19584.00
Total Customs Duty - Rs. 39584.00
Total Education Cess - Rs. 792.00 (2%of Rs.39584.00).
