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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. |
Are supplies from DTA to SEZ considered as exports, if so, under which section of the SEZ Act are they considered so?
Under section 2 (m) of the SEZ Act, supplies of goods or services from DTA to SEZ unit or SEZ developer defined to constitute "export."
We are an importer. We want to store imported goods in a public bonded warehouse for clearing as and when we require them. For doing so, the Custom insists us to furnish a BG equivalent to 100% of the import duty leviable. This will block our fund. Do we have a way out?
There is no uniform practice followed by various field formations of customs in respect of bank guarantee against goods to be warehoused in private bonded or privately owned public bonded warehouses. Customs Circular No. 99/95 provides that in respect of sensitive goods, (like liquour, cigarettes, foodstuff etc), a cash deposit or bank guarantee equal to 25% of the duty liability for each consignment would be required. In respect of non-sensitive goods, double duty bond with surety executed by warehouse owner would be adequate. However, Customs Commissioner may ask for a bank guarantee if he is not satisfied with the transaction of a particular bonder (trader).
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We shipped some consignments from JNPT, Mumbai under DEPB in Jan-Feb 2007 against which DEPBs were issued by the JDGFT. However, Our CHA is informing that these DEPBs would be manually verified for which he is raising service charges. The DGFT has announced that manual verification has been dispensed with. Is it correct?
In respect of DEPBs issued for shipments effected from an EDI port like JNPT, manual verification is not required. Such DEPBs are verified online. You may see Customs Circular 11 /2007 dated February 13, 2007 issued by CBEC which is available at www.cbec.gov.in
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The Joint DGFT office is not allowing full entitlement of fuel permissible in the SION on the ground that in the "General Note for Fuel" issued vide Public Notice No.20 dated 1.7.2002, a stipulation has been made that the import of fuel should under no circumstances exceed the limit of 7% of the fob value of exports. Thus, we are thus not in a position to fully utilise the licence for meeting our requirement. Kindly advise.
Fuel imported under the SION and the fuel imported under the General Note for Fuel should be treated differently. The FOB value limit of 7% as specified in the ‘General Note for Fuel’ is applicable only when the fuel entitlement is claimed under General Note. If the fuel is claimed under a specified SION, then the licence holder should be permitted to import the full quantity of fuel as per SION without any value limit unless the SION itself specifies quantity/value restriction.
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We are a BIFR unit which has an outstanding obligation under an advance licence that can be completed now for which we require extension in the period of export. Are we required to pay any composition fee?
As per paragraph 4.1.9A of the Foreign Trade Policy, extension in EOP to BIFR units, either as per rehabilitation package approved by the Board or up to 5 years reckoned from the date of issue of the licence, if the rehabilitation package did not specify any extension in period, is allowed without imposition of any composition fee.
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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 wants to import his inputs, required for manufacturing the intermediate product to be supplied to advance authorization holder, without paying customs duties through the mechanism of advance authorization for intermediate supply. ARO is sought in cases where the domestic supplier wants refund of the duties already paid on the inputs used in the product supplied to advance licence holder to convert them in a manufactured product for exports.
If a domestic supplier supplies the material against ARO, will this material also be exempt from Excise Duty as in the case of Invalidation (Excise Notification no.44)?
Exemption from Excise Duty is not available against ARO. Domestic supplier shall pay but may not charge you excise duty as the same will be refunded by DGFT as refund of terminal excise duty.
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My company has obtained an advance license for export. Is it required to export the byproduct also along with the final product?
It depends on the export obligation mentioned in the licence. If the licence mentions both byproduct and end product, which should logically be the case, both should be exported.
The Licence mentions that only the final product should be exported. But the Delhi office has rejected the fulfillment of export obligation under advance licence.
Logically, both byproduct and end product should be exported as both are the result of conversion of duty free inputs into final products.
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My company is into touring industry and has taken up sport-fishing activity. He takes the foreign tourists in the boats to sea. The tourists are given fishing hook and; they take out the fish and put them back into the sea. This is a kind of fishing but is considered as a sport activity. My client charges the foreign tourists and collects the money in foreign exchange through credit card or cash. He wants to import a boat for the activity. Can he import the boat under EPCG scheme?
Yes, he can import the boat under EPCG scheme but the company will be required to give detailed justification for import and earning of foreign exchange from such activity.
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We need to get the definition of Actual User of imported raw materials. Besides, we would like to know if there are any exceptions to those definitions.
Please see para 9.5 and 9.6 of the Foreign Trade Policy.
Any exceptions to the definitions? We believe that there are certain incentives announced by the Commerce Minister. When can we expect the implementation of the same?
The Commerce Minister has sent his proposal to the Finance Minister and the Ministry of Finance is working on it. Exceptions will be on case to case basis.
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We are importing dual use pharmaceutical raw materials for food products which are exempt from registration requirement under Circular 6-2/2004-DC dated 13 Dec 2005 for actual users. They are under advance licence. We are getting our product manufactured on job work. Are we actual users?
Yes. Paragraph 9.5 of the FTP covers such cases also.
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Mormugao Port Trust is giving port services to foreign ships having registered under SFIS and obtained DFCE. Our ore handling plant is under upgradation and the job has been allotted to a contractor who will be procuring imported spares. Can we use our DFCE licence for that purpose to minimise our project cost?
If the spare is related to port service operation, then there should not be any problem.
What is the procedure to be followed in such cases?
At the time of imports, you have to satisfy the customs that the spares are related to the activity for which DFEC was taken.
Import will be done by contractor and DFCE is favouring MPT. Please advise if it will be possible.
No, it will not be possible as DFEC is with AU condition.
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We are a manufacturer of pumps in Baroda and we have been exporting to a company (say ABC Ltd.) for its projects abroad through a third party since more than 10 years. We are taking EPCG and DEPB and exporting pumps in the company’s name (BRC in the name of ABC Ltd.) through our bank without opening ABC Ltd.’s account. Looking at Paras. 3.12, 3.12.8 and 9.62 of the new FTP, will ABC Ltd. have to open a bank account in our city for continuation of its requirement of BRC for third party exports?
Paragraph 9.62 of the Foreign Trade Policy only talks about BRC in the name of the third party which may or may not have an account in your city.
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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 the DGFT?
For conversion of a firm, from proprietorship to partnership concern, 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 change of the constitution of the firm.
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What are the stipulated criteria for the exporters exporting to Sub Saharan Africa, to become an Export House? We are regular exporters to Mauritius, Reunion, Ethiopia etc.
If you are solely exporting to countries in the Sub Sahara, covered under the Focus Africa programme of the Ministry of Commerce, then you can get the Export House status on achieving exports of Rs. 10 crore (since double weightage is available) in the three preceding years plus the current year.
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Can we start a leather wallet money purse manufacturing industry in Kolkata? Please suggest whether our leather manufacturing industry will be a viable industry or not, with regard to the availability of raw material and exporting the same.
It is advisable to get a feasibility study of the project carried out by an expert in the leather sector. Kolkata is an important center of leather goods and therefore raw material and skilled labour should not be a problem.
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JDGFT has issued a defaulter order to us despite our submission of all the required export documents except DEEC book (Export). Can the JDGFT declare an exporter defaulter even after submission of all the required export documents?
No, you can show the policy circulars issued by the DGFT regarding this matter. If you have submitted other documents, then non-submission of DEEC (export) should not be a ground for declaring a company as defaulter.
So far as we know, one Public Notice was issued stating that if an exporter submits all the export documents except the DEEC (export), JDGFT will not declare such an exporter a defaulter.
Yes, there is a circular on the issue. It is Circular no.33 dated 20-8-1998 which covers your case. Please show it to the licensing authority.
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"INDIA SHOW" From 13 to 19 February 2008 at Muscat, Sultanate of Oman
For participation, please contact: MRD Division Federation of Indian Export Organisations Niryat Bhawan, Rao Tula Ram Marg, Opp. Army Hospital Research & Referral, New Delhi-110057 Tel:011-46042114,46042136-38, 46042222, 26150101-04; Fax:011-26148194 Email: fieo@nda.vsnl.net.in; fieomrd@yahoo.co.in; anandpseth@fieo.org Website: http://www.fieo.org
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