Open House with B. S. Meena at Kolkata
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| Mr. B S Meena, DGFT (2nd from left) addressing the meet. With him, are from left, Mr. Anup Chattopadhyay, Chairman, Council for Leather Exports(ER);Mr. S. K Jain, Chairman, FIEO(ER); and Mr. Majoj Kumar, Zonal Jt. DGFT, Kolkata. |
The Eastern Region office of FIEO in as sociation with the regional office of Council for Leather Exports organized an Open House Meet at Kolkata with the new Director General of Foreign Trade, Mr. B S Meena on 28 December 2006. Apart from Mr. Meena, Mr. Manoj Kumar, Zonal Jt.DGFT, Kolkata, Mr. Anup Chattopadhyay, Chairman, CLE (ER), Mr. S K Jain, Chairman, FIEO (ER) and other senior officials of Customs and DGFT were also present in the open house which was attended by around eighty exporters of the eastern region. The open house was organized with a view to apprising the DGFT of the practical problems faced by exporters of the eastern region so that they are taken care of while formulating the new foreign trade policy.
The Open House started with a query raised by the representative of Phoenix Yule Ltd with respect to verification of DFRC/DFIA License issued on Deemed export basis by customs at the time of import. He said, "Customs is ready to do registration of the license but refuses to verify it saying they do not have clear instructions or procedures to verify the licenses. Mr. Tapan Majumdar, JtDGFT, New Delhi and Mr. S C Paul, Additional Commissioner of Customs, Kolkata assured the exporter to look into the matter personally.
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‘Timeframe’ will ensure transparency, says FIEO President Welcoming the guidelines issued by the Department of Revenue for timely disposal of various applications of exporting units set up under EOU/STPEHTP/BPT Scheme, FIEO President Mr. Ganesh Kumar Gupta said that exporters would now be able to concentrate on their marketing efforts instead of hanging around customs and central excise offices. Continuing further he said, it will also improve transparency and make the field officers feel accountable in discharging their duties. The FIEO Chief hoped that the field formations would implement the guidelines in true sprit. He urged the Revenue Department to issue similar guidelines for exporters in Domestic Tariff Area (DTA). |
Phoenix representative raised another point that though Advance License and DFRC License were valid for 24 months with a provision for revalidation of Advance License for six months including the break-even period, the Customs were refusing to do so. Mr. S Raout, Appraiser, Kolkata Customs assured to resolve the issue.
Kausik Printing Ink raised the query regarding problem faced by them in fixation of input/output norms for Advance License of the export product polyamide n/chips. Mr. Sanjeev Nandwani, JtDGFT, Kolkata informed that the DGFT Head Quarter had refused to approve the norms and had asked its Kolkata office to cancel the License. But he assured that hopefully the matter would be resolved in a month or so.
Ektara Exports P Ltd raised the problem faced by them while availing of benefit under DFCE Scheme. Mr. Meena assured to take up the matter with the Department of Revenue.
Premier’s Tea Ltd complained of facing a problem in custom clearance while importing Tea Bagging Machinery at 5% import duty as per Customs notification no. 175/2003 and 176/2003 dated 10.12.2003. According to the company representative, Custom official said that the said notifications were valid for tea plantation sector only and since Premier’s Tea Ltd did not have a tea garden they would not be entitled to it. After a lot of arguments, Custom official finally agreed to give clearance but with a warning that there might be audit objection, he added. He requested the DGFT to make the notification clearly state that 5% import duty is valid for "both plantation sector and industry". The DGFT assured to see if it was feasible.
The next issue was taken up by Mangal Steel Enterprises Ltd regarding different SION for ‘Alloy Steel including Stainless Steel’ and ‘Non-Alloy Steel’. Certain items previously manufactured by non-alloy steel are now manufactured with stainless steel which comes under alloy steel but due to no distinct notification on SION, the confusion prevails, said the company representative. Mr. Manoj Kumar informed that the DGFT office was considering same SION for both the types of steels and asked the exporter to give him a representation so that he could take up the matter.
The representative of Mangal Steel, a Star Export House said that though Foreign Trade Policy provides customs clearance for both import and export on self-declaration basis for status holders but no such scheme exists in Kolkata Port or Haldia Dock unlike other cities like Delhi, Mumbai etc. Mr. Paul, Additional Commissioner while responding to this informed that w.e.f. 22.9.2006 Kolkata Customs had also implemented this scheme called Risk Management Scheme (RSM) and statistics showed that 42% of the total bills filed till date had already been passed without any assessment including duty calculation given as per the status holder exporter. This particular system includes another scheme called Accredited Client Programme (ACP), said Mr. Paul. He further informed that Kolkata Customs House had also issued a Public Notice in 30.3.2006 inviting application from the status holder exporters so that they could register as ACP and the particular facility could be given to the exporter immediately but till date not a single application had been received.
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A view of the participants. |
Mr. O P Agarwal of R B Agarwala & Co took up the point regarding Refund of VAT. He informed the House that the West Bengal Government was delaying the procedure of refund of VAT in West Bengal and huge working capital of exporters was getting blocked in the process. He felt that the Central Government could look into the matter as other States were refunding VAT without much delay. The DGFT assured to inquire the matter.
Mr. Agarwal also said that as exporters of engineering items they were facing problems in exporting to US due to radiation factor from unknown source. "Containers are held up in transshipment port and shipping companies are not accepting the cargoes. Containers are returned back from US, UK, Canada and Netherland ports and none of the Indian ports is equipped to check the radiation, especially in Kolkata. Exporters are now importing this radiation checking equipments and also procuring them domestically but the Ministry of Commerce should take up the matter with US Customs, or should ask the Ministry of Transport to install the radiation equipments, as engineering goods worth nearly four billion dollar were held up" said Mr. Agarwal. He suggested that alternatively radiation survey metres made by US Customs might be imported and for that some duty exemption should be allowed. The DGFT assured to look into the matter.
Nandyala Satyanarayana raised a point regarding problem faced in verification of Vishesh Krishi Upaj Yojana for exports through Petrapole and Ghojadanga Land Custom Stations. Mr. Khokar, Additional Commissioner, Kolkata Customs said that he would ask Petrapole and Malda Customs to look into the matter. Mr. Manoj Kumar also assured to get the issue resolved.
Howrah Mills Company urged that Latin American Countries like Brazil, Peru, Malawi, Ghana, Ecuador, Honduras, Costa Rica and African countries, should also be included in the list of the Focus Market Scheme. The DGFT responded that Focus Market Scheme was targeted at countries where our actual exports were much less than the existing potential and so all countries could not be included under the scheme. But he said that there could be some improvisation in the list in future.
J J Exporters Ltd said that as per Foreign Trade Policy, upto 31.3.2003 the Advance License holder exporter of "Silk Sector" had the option to process the imported material through other manufacturer, including a jobber, and was liable to fulfill the export obligation, but since 1.4.2003 although the exporter was still allowed to handover the imported material to other supporting manufacturers, it has been specified that the names of such supporting manufacturers must be endorsed in the Advance License. The company representative requested that the list of supporting manufacturers should not be asked for endorsement since such manufacturers were in tiny/cottage sector and not registered as SSI. Mr. Manoj Kumar while responding to this informed that as per Para 4.16 of the Hand Book of Procedures, if the goods were non-excisable or if the exporter was not required to get registered with Central Excise, then in that case jobbers might be allowed as per Central Excise Rules. The DGFT in order to clarify further said they would never ask for an endorsement of list of jobbers if Central Excise allowed it, but Mr. Jhunjhunwala of J J Exporters informed that the Central Excise office would never allow this as it doesn’t come under Central Excise at all. On this Mr. Tapan Majumdar said that the issue was discussed with Revenue Department and initially they agreed to it but insisted that Jurisdictional Central Excise authority should be approached by the exporters for such an issue.
J J Exporters Ltd raised another problem faced when the DGFT asked for information relating to export obligation as old as 15-20 years even in case where export obligation had been completed and the LUT had been discharged. The exporter felt that there should be a time limit within which such queries should be made. Mr. Manoj Kumar assured that the exporter would not face any problem in future from his department but he said that audit queries could not be done in a time limit.
Mr. P K Didwania of Engineering Exports Ltd brought forth the problem faced due to non-implementation of Public Notice No 57(RE-2005)/2004-09 dated 6.10.2005 by Kolkata Customs regarding verification of DEPB Licenses issued online. Responding to it, Mr. Manoj Kumar informed that the matter had been taken at the level of Chief Commissioner and Member (Customs) and explained that the Customs Server could not access License data from the DGFT server. At this the Zonal JtDGFT informed that few days ago the problem had been solved and Customs Server could now access license data from DGFT Server and could pass the data the port servers.
Mr. S Banerjee representing Council for Leather Exports brought forward certain points related to leather sector. He informed the House that though Kolkata was a very important tanning center in India and almost 22% of the whole country’s tanning was carried out in Kolkata which had one of the two authorised slaughter license centres in the country, huge amount of hides and cattle were being smuggled to neighbouring countries like Bangladesh causing shortage in supply of raw materials for the tanneries in and around Kolkata and North Eastern States. So, the leather exporters should be given some incentive by the DGFT to discourage smuggling, he suggested. Mr. Manoj Kumar assured that the matter would be taken up with the Border Security Force to check the incidence of smuggling.
Another issue relating to leather sector was raised with respect to Duty Drawback. Leather exporters avail the scheme of Duty Drawback at the rate of 8.25% allowed on small leather items which can be carried in briefcase whose outer surface are made of leather or patent leather like wallets, purses, key rings and even handbags. But the exporters said that Kolkata Customs allowed 8.25% of Duty Drawback only on wallets whereas for other items, classified under "other items," only 5% Drawback was allowed. The exporters also said that objections were raised by customs only when Drawback was claimed and not while shipping the goods. Mr. Paul asked for a representation on the matter and assured to look into it.
The third issue from Leather sector was raised regarding Zipper. Leather exporters avail duty free import scheme at the rate of 3% and as per Indian Customs ITC Code. "Zipper" is one of the items which are entitled for duty exemption under this scheme. But certain components of Zipper like Zipper Roller Balls and Sliders when imported separately are not being allowed duty exemption, claimed the exporters. The urged the DGFT that these components, which are parts of the Zipper, should also be brought under the scheme. The DGFT informed that the matter was already being taken up with the Department of Revenue and something tangible was expected to come out soon.
Mr D K Bubna from Ludlow Jute Mills sought the continuation of Target Plus Scheme by plugging some of its identified loopholes. Mr. S K Jain added that exporters of Eastern India were small and were not involved in misutilisation of the scheme and so the continuation of the scheme should be considered at least for exporters of this region. Regarding Target Plus Scheme, Mr. Chobdar of Nagreeka Exports Ltd enquired about the exact rate of entitlement in view of the Court Order. Mr. Jain informed that Mumbai High Court had issued an Order that till the matter was settled exporters could apply on original rate. The DGFT asked Mr. Jain for a copy of the Court Order and promised to look into the matter.
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Ethiopia offers scope for joint ventures in tea, coffee There is a good scope of establishing joint ventures in Ethiopia by the Indian businessmen in view of duty concessions offered by the Ethiopian Government to the foreign investors, FIEO President Mr. Ganesh Kumar Gupta said in a meeting organized by FIEO in its own office in New Delhi on 9th January 2007 with Mr. Gurjit Singh, Indian Ambassador to Ethiopia. FIEO chief also informed the participants that FIEO was planning to sponsor a multi-product business delegation to Ethiopia in the near future. Besides FIEO officials such as Mr. Subhash Mittal, Member, Managing Committee, Mr. Ajay Sahai, Director General, and Mr. Ashok Kumar, Dy. Director General, many exporters were also present in the meeting.
re-export to neighboring African countries," said Mr. Singh. Praising a sustained GDP growth of 10% achieved by Ethiopia for the last few years, the Indian Ambassador also observed that Ethiopia could be a good market for pharmaceuticals, agro products, cement, leather products, plastics and auto parts. He suggested FIEO to consider inviting Ethiopian businessmen for reverse buyer-seller meet in India. He also suggested FIEO to consider visiting Ethiopia during Addis Ababa International Fair in February 2007 and assured the support of Indian Mission in organizing buyer seller meet and other interactive meets with Ethiopian business organizations. |
Uma Exports (P) Ltd took up the issue of Agricultural Cess. Mr. Majumdar informed that as far as the Ministry of Commerce was concerned, the Cess had been abolished but the issue was pending with the Ministry of Agriculture. On this Mr. Jain said that the matter was brought to kind notice of Mr. Kamal Nath, Honble Union Minister of Commerce and he agreed that whatever money had been paid against this cess would be refunded to the exporters but an official notification was still pending in this regard.
Uma Exports (P) Ltd raised another issue regarding exports through Ghojadanga Land Customs Stations. Customs are not allowing any shipping bill with FOB value above Rs 10 lac and if the FOB value of shipping bill is above Rs 10 lac, the exporters are asked by Customs to get permission from the Deputy Commissioner, Kolkata, said the company representative. He added that as a result the exporters were breaking up the consignment which raised their transaction cost. He requested Mr. Meena to help declare the Ghojadanga LCS as a notified port. Mr. Meena assured to take up the matter with Department of Revenue.
Mr. S K Bhatta of Creative Ltd enquired about the application date for Focus Market and Focus Product. The DGFT informed that the application for Focus Market could be submitted till March but said that the guidelines for Focus Product were yet to be announced.
Towards the end of the open house, Mr. Meena assured that all the issues raised in the open house would be considered while formulating the forthcoming Foreign Trade Policy.
