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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. |
I like to know about the changes made by RBI in Export Import Procedure notified recently.
In the changes notified by the RBI on 28th February 2007, Authorized Dealers
have been permitted to extend the period of realization of export proceeds
beyond 6 months from the date of export, upto a period of 6 months at a time
irrespective of the invoice value subject to laid down criteria.
The write-off facility which was 5% of average annual realizations during preceding 3 calendar years subject to certain conditions for status holders and 10% (of the export proceeds) to all exporters including status holders in a given calendar year subject to certain conditions have been modified. Now the status holder exporters may write-off outstanding export dues to the extent of 5% of average annual realizations during the preceding 3 years or 10% of the export proceeds due during the financial year, whichever is higher.
Reduction in invoice value has been allowed upto 25% as against the earlier cap of 10% in cases where the original buyer defaults on the payment and the goods are to be transferred to another buyer once they have been shipped.
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We want to enter into textile manufacturing. We are informed that a number of concessions have been given for this sector. Pl. provide us the details.
The incentives for
units in textile sector are:
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The Government has launched the "Scheme for Integrated Textile Parks (SITP)" to provide the textile industry with world-class infrastructure facilities for setting up their manufacturing unit.
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100% Foreign Direct Investment is allowed in the textile sector under the automatic route.
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The Government has de-reserved readymade garments, hosiery and knitwear from the SSI sector.
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The Technology Upgradation Fund Scheme (TUFS) has been made operational from 1.4.1999 which will continue till 11th Plan Period to facilitate the modernistion and upgradation of the sector.
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The fiscal duty structure has been generally rationalised to achieve growth and maximum value addition within the country. Except for mandatory excise duty on man-made filament yarns and man-made staple fibres, the whole value addition chain has been given an option of excise exemption.
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The import of specified textiles and garment machinery has been allowed at a concessional rate of customs duty.
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Garment exporters are eligible for duty-free import of trimmings and embellishments valuing up to 3% of their actual export performance during the previous year.
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We are importing filter bags and exporting the same to our customer in Bhutan. Can we get import exemption if we receive payment from our customer in Bhutan in Indian Rupees?
Export to Bhutan in Indian Rupee is not eligible for export benefits under
Foreign Trade Policy.
Can you please tell me
the rate of custom duty on import of filter bags falling under Tariff
heading 84213990? These filter bags are used in equipment called bag house
for catching the dust. It is one of the components of bag house (bag
filter). We are manufacturers of air pollution control equipments in which
these filter bags are used.
The basic duty is 12.5%, additional duty is 16%, Spl. CVD is 4%. Thus total
import duty is 36.736%. Kindly check if there is any change in duty for this
item under recently announced Budget.
It means if we import
filter bags and export to Bhutan then we can claim 4% CVD as CENVAT.
16% Additional duty and 4% Spl CVD is CENVATABLE; rest is to be added in the
cost.
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We are a merchant exporter. We want to export cable processing machinery and EOT Crane, both made of fabricated steel worth Rs.1.5 crore. What type of export benefit can we avail other than DFIA and Advance Authorization? As we want to export for one time only, we can’t go for DFIA and Advance Authorization. Also, there is no specific product description available in the DEPB list for this particular machinery. Since we are exporting the machinery worth Rs.1.5 crore, we feel there should be some kind of benefit for the exporter. Please comment.
Please check all industry drawback rate also. If the same is not available, you can get brand rate of DBK fixed to get refund of duty paid by you.
Where can I get the information on brand rate of DBK?
The detail of the scheme is available at www.cbec.org. You may approach the
excise authorities to get the details.
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We are manufacturer
exporter of hand made carpets. Our one of the wholly owned subsidiaries,
which is engaged in manufacturing of machine-made floor coverings, imported
machineries under EPCG scheme. Now we want to fulfill export obligation
through export by the parent company. But customs authorities say that the
machinery should be used in the manufacturing of the product being exported
for fulfillment of EO, or the importer of the machinery should be a
supporting manufacturer. Kindly clarify.
Which is the customs notification number under which import had taken place?
Customs notification
No is 097/2004 dated 17/09/2004.
The objection of the Customs is incorrect. If you are part of the Group
Company as defined under the Foreign Trade Policy, you may do it and
discharge the obligation by exports of the parent company and in such
scenario, there is no point of exports from the same machine.
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If our total export for the last three years is Rs. 10 lakh (1st year - zero, 2nd year - zero and 3rd year - Rs.10 lakh), then what will be our average export obligation?
It will be one-third of the total export in the last three years, ie Rs
3,33,334.
How can I redeem my
EPCG License where I have mentioned average EO as Rs. 10 lakh?
Get the average EO corrected to read as Rs 3.33 lakh and then meet the
average and additional EO and get your case redeemed.
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Will DEPB Scheme
continue or will some new scheme be introduced after 31st March 2007?
The DEPB Scheme is likely to continue for some more time as new scheme has
not been formulated so far.
Will the DEPB rates change after the Budget to adjust with Custom Duty?
Yes. It is always done if the inputs which were taken into account for
fixation of the rate are subject to any change in basic customs duty after
the Budget.
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What is the customs notification under which goods can be imported for ATA Carnet?
Import of goods for ATA Carnet is allowed under customs notification No.157
dated 28.3.90. Under the said notification, such goods are exempted from the
whole of customs duty if they are for events listed in Schedule II and III
of the notification and if the event is being held in public interest.
Are we required to
give bank guarantee for imports under ATA Carnet?
Since FICCI is guaranteeing association for ATA Carnet in India, import of
goods conforming to ATA Carnet certified by customs in the country of
exportation is allowed this facility without bank guarantee as FICCI stands
as guarantor in this case.
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I export by courier. I have no proof of shipment except a courier receipt. What should we submit in the bank as proof of custom clearance?
In case of exports by courier also you will have courier copy attested by customs allowing the shipment. The same may be produced to bank as proof of customs clearance.
Upto what value of
samples can we send to the same customer in a year?
There is no restriction on export of samples of freely exportable products. However, you may require GR/SDF waiver from the RBI.
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Our company wants to
export goods to USA worth US$ 18,000 without SDF declaration but custom
authorities in Delhi are not allowing the same saying they have no
instruction in this regard.
Export of goods valued not more than USD twenty five thousand (US $ 25,000) have been exempted from filing GR/PP declaration. The Department of Revenue has also issued a Circular (number 53/2004 dated 13th Oct. 2004) allowing the above facility. You may produce a copy of the same to Customs which is available at www.cbec.gov.in
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What is tariff
valuation under the Customs Act?
Normally customs duty is levied on assessable value of the goods as decided
under Section 14 of the Customs Act. However, certain items which are
subject to vast fluctuation in prices are put under tariff valuation so that
the duty is levied on notified tariff value by the Customs. The tariff value
is subject to periodical revision.
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We want to import 15
year old machinery from Italy? What is current Policy about import of
second-hand capital goods?
Import of second-hand capital goods is freely allowed without any age
restriction and therefore you can import 15 year old machines.
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Can you please provide
us the number of excise notification of 2001 which allows duty free supply
of goods under advance license for intermediate exports?
Please see Excise Notification 44/2001-CE dated 26-6-2001 for export under bond on removal of intermediate goods without payment of duty for manufacture and export by advance licence holder.
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What is the difference
between ‘Invalidation Letter’ (used for getting the supply from
indigenous sources against an Advance License) and ‘Advance Release Order’?
Which is better?
Invalidation letter is normally used when a domestic supplier 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 export product.
In case of Invalidation Letter, the domestic supplier gets exemption from excise and import duty free inputs. In case of ARO he will be entitled for the refund of the duty. Then why will someone go for ARO?
It is the choice of the domestic supplier to use either of them. If duty paid inputs exists in his inventory, he uses ARO and applies for refund. Otherwise, he has the option to import inputs without paying any duty.
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I have an advance
license expired on 31.08.2004. Can I get the export obligation period
extended period as per paragraph 4.22.1 of HBP from RLA?
Regional Licensing Authorities can allow extension in Export Obligation
Period. The first 6 month extension is granted on payment of composition fee
of 2%, next 6 month extension at 5% and thereafter at 2% per month.
Can we get extension
beyond 36 months also?
Yes, you can get it for any number of months. Please see Public Notice 49
dated 2-9-05.
