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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 want to know for how long werequire maintaining old record for advance licence and meeting the various provisions of the Foreign Trade Policy.
I would like to draw your attention to paragraph 9.7 of the Handbook (vol.1) which prescribes the period of retention of record. For advance licence, the record is to be kept for a period of three years from redemption of a case. For import with actual user condition, it is three years reckoned from the date of import. You may see the scheme specific retention period under different chapter of the Handbook of Procedure.
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We have two manufacturing excisable units in our company producing the same product. We have imported some inputs under an advance licence. Can we transfer it 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 prior permission of the jurisdictional Excise Authorities with a clear understanding that no benefit of CENVAT shall be claimed on such transferred inputs. However, to avail the facility, all such units should be endorsed in the IEC certificate.
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We are suffering due to rupee appreciation, what do we do?
Currency fluctuation is part of international trade but the appreciation of Rupee in last one year is a cause of concern. You need to cover yourself through risk covering instruments such as hedging, factoring etc.
We have an order from abroad for the manufacture of certain item from the
raw material which is to be imported. Such material is imported by another
purchaser which is to be kept under bond. Whenever we require such
materials, they have to be cleared from the Bonded Warehouse where the goods
are kept. For the purchase of such material, we will pay the consideration
only in INR (rupees). Finished goods from the said material will be sold
/supplied to 100% EOU and the realisation will also in INR only. What
mechanism should we follow to implement it?
You can import under advance licence or take the procurement from a bonded warehouse against surrender of advance authorization. The supply made to 100% EOU will discharge the application. Since supply to 100% EOU is considered as deemed exports, payments received in Indian Rupee will be counted for meeting the export obligation against advance authorization.
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Can you tell us the duties exempt under target plus license? We understand
that the duty structure normally applicable for Cement Clinker (H.S code )
is BCS 10% + CVD Rs 350 + Ed Cess on CVD 2% + S H.ED Cess 1% + Cus Ed Cess
2% + Cust S.H Ed Cess 1% + SAD 4%. If we use Target Plus license, which of
these will be applicable and which would be exempt?
As per Customs Notification 32/2005 dated 8th April, 2005 relating to the Target Plus Scheme, the whole of the duty of customs leviable thereon under the First Schedule to the Customs Tariff Act 1975 (51 of 1975); and the whole of the additional duty leviable thereon under section 3 of the said Customs Tariff Act are allowed to be debited from the credit available under the Target Plus (TP) licence.
Does it allow the CVD which is fixed at Rs 350 Per Ton?
Yes, it can also be adjusted from TP licence, as it is levied under section 3 of the Customs Tariff Act.
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What is the minimum investment required in Plant & Machinery for an EOU? What is the positive net foreign exchange?
The required minimum investment is Rs 1 crore, except for agro and allied sectors, IT, services, handicraft, brass hardware and handmade jewellery. Positive Net Foreign Exchange means that you should gain foreign exchange for the country. Thus, your fob value of export should be more than the import value + royalty + commission etc.
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We are an Export House and exporting products manu-factured/processed by SSI.
We are exporting as Merchant Exporter. Can we get double weightage for
Export House status?
Yes, both merchant and manufacturer exporters are eligible for double weightage and hence in exporting SSI products as a merchant exporter, you will get double weightage.
Which are the SSI Documents required to be submitted to the DGFT to claim
Double Weightage?
Your CA should certify your claim for double weightage after duly satisfying
himself and you may be asked to produce the documents related to SSI
registration.
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Are there any changes in service tax on payments to foreign agents in current export policy?
The Commerce & Industry Minister has announced the exemption from service tax in the foreign trade policy but revenue notification is awaited. It will be applicable only once the notification is issued, which is expected in 30 days time as announced.
Is there any clarification for the refund of service tax paid in pervious
years on commission to foreign agents?
I do not think so. We at present are looking at the relief which is prospective. The issue of retrospective reimbursement may be taken up later.
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We are exporting 100% polyester fabrics to Gulf countries and availing
drawback under sec 540702 A. Can we avail any other benefit on these items?
You can avail EPCG scheme for the import of machineries required for manufacturing fabrics besides duty drawback.
We are a religious organisation and run a broadcasting channel. Some of our
followers are sending money in foreign exchange through banks. We have
claimed these under the Served From India Scheme. The DGFT is objecting
saying that these are not commercial services. What is your opinion on the
issue?
Only foreign exchange received in lieu of services rendered are eligible for
benefit under Served From India Scheme. In the situation referred by you,
payments are in the nature of donations and therefore DGFT’s stand is
correct.
We have one star export house status and we applied for Served From India
Scheme for the year 2005. As per the then prevailing rules, services
rendered are sponsorship of TV programmes for which we have raised bills,
linking with time. We have declared the same in service tax returns. We
understand that it is a service for the people who require.
If the money received by you is meant for sponsorship of programmes, then it
should be counted as services eligible for the benefit of Served From India
Scheme.
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We are running a hospital. We receive a number of foreign patients including
the NRIs. We bill them in Indian Rupees. They exchange their currencies from
the Authorised Dealers and pay us in Indian Rupees. We understand that these
are indirect forex earnings and we want to claim benefits under Served From
India Scheme. Do we need to attach photocopies of the encashment
certificates along with their bills for the benefits under the Scheme? Can
we also claim Room Rentals as earnings as in the case of Hotels?
Please go through the policy circular 60 dated 24-12-98 which addresses the issue raised by you.
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We want to export agro products from Bihar.
Please contact APEDA, the authority set up by Ministry of Commerce to promote agri product exports.
Is there any office of APEDA at Patna?
You may contact their Kolkata office at: Mayukh Bhawan, Bidhan Nagar, Salt Lake City, Kolkata – 700091 Ph.: 033-23378363, Fax : 033-23378680.
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Export of pulses is prohibited from 27th June 2006 except for under advance license. Will the benefit of Vishesh Krishi Upaj Yojana (VKUY) be available for export of pulses made against advance licence?
Exports of items, which are otherwise restricted for exports, are not eligible for VKUY and therefore going by the objective of the scheme, my view is that the exports allowed under advance licence may not be eligible for VKUY. However, you are advised to take a clarification from the DGFT before arriving at any conclusion.
We got export licence for restricted items (Dal Channa) from DGFT and we
deposited a DD of Rs.1,50,000 as fees. But on 7th March, Dal Channa was
opened for export under OGL. Can we get the refund of the DD Amount?
No refund will be made once you got a licence applied by you. Refund is permitted only in case of excess payment or in case no application is preferred after application fee is deposited in the bank.
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I heard that DFRC is being replaced by a new scheme. Kindly inform about it.
DFRC scheme has already been replaced by DFIA scheme with effect from 1st May 2006. The DFIA Scheme is on the pattern of advance authorization scheme which is with actual user condition prior to completion of export obligation but is allowed to be made transferable after completion of export obligation.
What changes have been made in DFIA Scheme recently?
With a view to resolving the problem faced by the holder of Duty Free Import Authorization (DFIA) on account of certain dispute on CENVAT issue, the transferability of the authorization has been made subject to payment of additional custom duty/excise duty. The duties shall be reimbursed through drawback benefit in cases where it is not offset through CENVAT procedures.
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Is there any duty concession for import of almonds from Afghanistan?
Afghanistan enjoys tariff concession under Indo-Afghanistan Preferential Trading Agreement (IAPTA) as given in Customs Notification 76 dt. 13-5-2003. The rate of concession varies from product to product. On import of Almonds (shelled, thin shelled and hard shelled), falling under ITC (HS) Code 0802, 50 % concession on applicable basic customs duty is available. The concerned notification is available at www.cbec.gov.in.
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I have exported goods under DFRC which were found defective and therefore re-imported. After repair of the same, I have re-exported them. Can I get any benefit on such re-exports?
As per Custom Circular No. 29 dated 8.7.2005, you will be eligible for DFRC
for 95% of the CIF value from 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.
Short Term Refresher Programme on International Trade
Duration : Five Day Programme (Monday to Friday) Date : 18-22 June, 2007 Time : 2.15 p.m. to 5.30 p.m. Venue : Indian Institute of Foreign Trade (IIFT), IIFT Campus, B-21 Qutub Institutional Area, New Delhi Participation Fee : Rs. 3,000 per participant The Programme will cover:
Specialists from IIFT, trade-related Ministries and FIEO will constitute the faculty. A Certificate will be given on completion of the Programme. Interested
executives may send Demand Draft/Cheque for Rs. 3,000/- made out in favour
of the Federation of Indian Export Organisations, New Delhi to Jt. Deputy
Director General, FIEO (Northern Region), Niryat Bhawan, Opp. Army
Hospital Research & Referral, Rao Tula Ram Marg, New Delhi 110057, Phone
: 26150114, 26150101-04, Fax : 011-26148194, Email : fieo@nda.vsnl.net.in,
Website: http://www.fieo.org
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