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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 are a domestic manufacturing unit and wish to convert our unit into an EOU. Where can I find the procedures for conversion?
You may see Paragraph 6.37.1 of the Handbook of Procedures, Vol. I that provides the procedure for conversion of an existing DTA unit into an EOU. Read with details given in Public Notice No. 74 dated 24th of October, 2007.
We are having an Advance License as well as an EPCG License where the export obligation is still pending. What would happen to these Licenses upon conversion from DTA to EOU?
So far as EPCG License is concerned, the outstanding export commitment will be added to future export obligation by adding the value of capital goods to the imported capital goods and previous export obligation under EPCG would merge on such inclusion. For advance authorization, you have to approach your concerned Customs and Excise Authorities and obtain a certificate showing physical verification of the unutilized material in the stock against the advance authorization and such unutilized raw material shall be carried forward towards EOU Scheme. Thereafter, you would be required to approach the Licensing Authority with the certificate of stock verification from Customs/Central Excise, LUT executed with Development Commissioner and details of imports/exports against the advance authorization. Licensing Authority will calculate unfulfilled export obligation and issue ‘No Objection’ to the Development Commissioner and Central Excise Authorities. Thereafter, you would be required to approach Customs/Central Excise Authorities for execution of B-17 Bond.
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We are interested in importing certain goods from China through Nathula Port. Can we import the goods without having IEC Number?
Goods up to the value of Rs. 1 lac can be imported from China through Nathula Port without an IEC Number. However, if you wish to import goods above Rs. 1 lac, then you would have to take IEC Number from the DGFT.
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We have two units in our company manufacturing the same product. We have imported some inputs under advance authorization. Can we transfer it to our other unit?
Transfer of any duty free material imported or procured against advance authorization 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 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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Why is export to Nepal and Bhutan not eligible for excise duty exemption?
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 certain cases.
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We are a 100% EOU. We want to send the documents directly to our client to avoid the high banking cost. Can we do so?
Please see paragraph 3.7.2.1 (iii) of Foreign Trade Policy. The exemption from compulsory negotiation of documents through banks, provided remittance is en-route through banks, is available to Status Holders only. Other exporters can 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 merchant exporters and our export turnover exceeds Rs.5 Crore in the previous year. Can we avail benefit of import under advance licenses without executing Bank Guarantee?
In case you are a regular exporter for the last three years and your export in the preceding year on FOB basis is Rs 5 Crore or more and you have a good track record, then you can furnish Bond instead of Bank Guarantee as per Customs Circular 58/2004, dated 21.10.04.
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Customs are insisting for DEEC Book in respect of Advance License for annual requirement. As we understand, this requirement has been dispensed with in Advance License. Kindly comment.
Although the requirement of DEEC book has been withdrawn from 1.4.2002, in the case of Advance License for Annual Requirement Scheme, the Customs field formations were insisting for the same for want of deletion of the clause from the corresponding Customs notification - Notification No.94 / 2004-Cus dated 10.9.2004. However, this notification has since been amended vide notification No. 43/2006-Customs dt. 5.5.2006. The amendment deletes the requirement of DEEC book for Advance License. Thus annual requirement is no longer required. You may approach Customs with notification No. 43/2006-Customs dt. 5.5.2006.
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What is the minimum investment required in EOU plant and machinery? What is meant by achieving positive net foreign exchange?
Minimum investment is Rs 1 crore, except for agro and allied sector, IT services, brass hardware and handmade jewellery. Positive Net Foreign Exchange means that you should achieve positive foreign exchange for the country. In other words, your FOB value of exports should be more than the CIF value of import + royalty + commission etc.
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We are a SEZ unit. Please advise whether Service Tax Notification No. 41/2007,dt. 06.10.2007 is also applicable for SEZ or not.
SEZ units are normally exempt from service tax .However for services covered under the Notification 41/2007 for which such facility is not available; re-imbursement should be available to SEZ units.
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Are any changes expected in Para 5.4.(v) of FTP towards providing Focus Product benefits to EPCG licence holder?
Because of fund constraints, it may not be possible this year, but the DGFT has agreed to examine this issue during the policy changes for next year.
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We ship consignments to Morocco and Libya but there are no direct vessels to these ports. Hence, goods are transshipped to the final destination. However, the final destination is as per the Focus Market Scheme (FMS). Is there a problem in getting the FMS facility in such a case?
There is no problem in getting FMS as Paragraph 3.9.2.2(a) (ii) has been amended in the revised FTP.
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We took some advance licenses, completed exports, took the no-bond certificate from DGFT and then our supplier imported the raw materials. What should we do with the material now?
You may use the material imported after completing exports for producing goods either for exports or domestic production. If you use such goods for exports, you will be eligible for Drawback or DEPB benefits.
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What are the facilities given to Status Holders by the Government?
Status Holders are entitled for various benefits (a) Repatriation period of 360 days for realizing export proceeds as against 180 days for other exporters (b) 100% retention in EEFC as against 50 % by other exporters (c) exemption from compulsory negotiation of documents through banks (d) exemption from Bank Guarantee while importing under duty free or concessional duty scheme and (e) Fixation of Input Output norms in 60 days etc.
