"It’s time exporters were paid back"

Sitting on the dais. The Chief Guest Mr. R.S.Glujral, DGFT(4th from left). On his right are Mr. Ganesh Kumar Gupta, President, FIEO; Mr. S.S. Sandhu, Zonal Jt. DGFT; Mr. Tapan Majumdar, Jt. DGFT. On Mr. Gujral’s left are Mrs. Paru Jaykrishna, President, Gujarat Chamber of Commerce & Industry; Mr. S.K. Saraf, Chairman, FIEO(WR); and Mr. A.K.Singh, Jt. DGFT.

Today, domestic business is giving more returns vis-ŕ-vis exports due to appreciating rupee, thus resulting in decline of exports. In April-June 2007 quarter, exports dropped to 18.22% from 27.63% for the same quarter previous year. Government is taking some policy initiatives, but concrete remedial measures are required to keep the exporters going. Exporters all over the country feel that the RBI should intervene and check the upward growth of rupee. When US Federal Bank can reduce interest rates, why can’t Indian Central Bank reduce PLR? FIEO President Mr. Ganesh Kumar Gupta said at an Open House of exporters with DGFT officials. The Open House was organized by FIEO in association with Gujarat Chamber of Commerce (GCCI) and CHEMEXCIL on 28th September at Ahmedabad.

For handicraft, leather, textile, gems & jwellery export sectors which are labour intensive, said Mr. Gupta, income tax exemptions under Sec. 80HHC should be reintroduced, at least for another three years. "Today no exporters are making more than 5% profit. Commodity exporters are making only 1 to 1.5% profits whereas gem & jewellery units are making about 1.5% to 2% profits, so Sec. 80HHC should be re-introduced," he said.

FIEO Chief then touched the issue of service tax. He said, "If the government is committed to its principle of not exporting taxes, then why are many other services used in the course of exports like bank charges, overseas commission, professional fees etc. still awaiting exemption? Exporters are paying service tax even on courier charges on samples sent abroad. This is unjust and unreasonable. And we don’t need refund; we want complete exemption as the process of refund is very very taxing."

"Today our GDP and Sensex are booming, but the government should not forget the year 1991 when our gold was pledged to other countries and when our Hon’ble Prime Minister, who was then the Finance Minister, urged the exporters to step up their efforts and earn more foreign exchange for the country. The exporters did their part to help the country build a robust forex reserve. Today when exporters are in crises, it is time our Hon’ble Prime Minister paid us back."

Mr. Ganesh Kumar Gupta

President, FIEO

GCCI President Ms Paru Jaykrishna in her address said that Gujarat was a front runner state in terms of contributing to total national exports as the state was a major exporter of pharma products, chemicals, engineering goods, ceramic products, marine products, etc. She said, "Gujaratis are spread all across the globe and they help in sustaining our international trade efforts. Gujarat is the only state which has maximum number of private and specialized commodity handling ports in the country. Mundra Port & SEZ is the shining example of a best managed port in the private sector."

Commenting on Rupee appreciation, GCCI President said that despite some initiatives taken by the government to provide succor to the exporters, the exporters were still by and large dejected. If the government does not want to take monetary measures, she said, then at least the DGFT should impress upon the state governments to exempt export production from levy of electricity duty which would neutralize the adverse effect of rupee appreciation to some extent.

While listing out the recent initiatives taken by the Federation to help exports, FIEO’s Western Region Chairman Mr. S K Saraf said "We have set up India Trade Centre in Bucharest, Romania with support from Ministry of Commerce and we invite you to take advantage of this. Romania has joined EU and is now the gateway to South & Central Europe."

Enumerating the future initiatives of the Federation, Mr. Saraf said, "FIEO is organizing a three-day mega-event called Opulence-08 Lifestyle Show beginning 11 January next year at Mumbai. All lifestyle products textiles, leather, jewellery, etc will be on display. We shall organize this fair every year."

Mr. Saraf then referred to Indian Exporters Grievance Forum which has

DGFT inaugurates Ahmedabad Office of FIEO

The Ahmedabad Office of FIEO was inaugurated by the
Director General of Foreign Trade Mr. R S Gujral (IAS) on 28th September. Addressing the ceremony, Mr. Gujaral expressed hoped that the new office would help FIEO to serve its 1800 member exporters in the State of Gujarat more effectively.

On this occasion, FIEO President Mr. Ganesh Kumar Gupta said that the Federation was engaged in building the necessary paraphernalia to open its Ahemedabad Office for the last two years. The Western Region Chairman of FIEO Mr. S K Saraf said that now onwards the Federation would be able to directly service its members from Gujarat who had to come all the way to Mumbai for various services like membership, issue of Certificate of Origin, visa recommendation letters, etc.

Dr. Shyam Agarwal, Additional, DGFT, Mr. Tapan Majumdar, Jt DGFT, Mr. A K Singh, Jt DGFT, Mr. A N Misra, JtDGFT, Ahmedabad, Mr. Ajay Sahai, DG (FIEO) and a host of eminent members from Ahmedabad were present on the occasion.

been set up by the Federation to take up issues of the exporters relating to 80HHC, Service Tax, Target Plus etc. On being asked to comment on the current status of issues relating to Target Plus Scheme, he said, more than 50% of exporters’ concerns over the issue have been settled, rest of the issue are subjudiced and we hope they will be resolved shortly.

 

Commenting on how to boost exports from Gujarat, Mr. Saraf said, Ahmedabad requires world-class expo centre like the one in Delhi, Hyderabad, Bangalore, and in Mumbai where it is expected to come up in Bandra-Kurla Complex. Ahmedabad International airport requires expansion and upgradation faster. Some journalists asked me today morning as to why most diamond exports are taking place from Mumbai in spite of the fact that most production units are based in Surat. I told them that it was 

A view of the participants.

because Mumbai was the gateway airport. Gujarat is blessed with excellent biggest coastline and a number of ports also but what is missing is good rail & road network. Added Mr. Saraf.

The Director General of Foreign Trade Mr. R. S. Gujral during his address commented on the observation made by FIEO President and said the situation has changed from 1991 but still the government is very much conscious to see that our exports continue to flourish. On the issue raised by Mr. Saraf with respect to EPCG for debonding of EOUs, he assured to look into the matter.

Issues discussed during the Open House at Ahmedabad

  • Interpretation of DEPB clauses including that mentioned in DEPB Schedule. To take up with Department of Revenue to finally assess the shipments from valuation angle at the time of export and thereafter the exporter will be subject to decision by DEPB Committee, in cases of doubts relating to interpretation of DEPB clauses including classification of DEPB Entry, as mentioned by Customs on the Shipping Bill. Exports shipments or Shipping Bills should not be held up for doubts in interpretation of DEPB clauses. To instruct Zonal Offices to create Help Desks for sorting out such problems expeditiously.

  • Debonding of 100% EOU – To take up the issue of Exit of EOU without any further EPCG obligation at the time of Foreign Trade Policy (RE: 2008).

  • Sale/Transfer of Surplus Imported Capital Goods of EOU to EPCG License holders – Capital goods that are in use by the EOU for at least 5 years may be examined to be allowed to be sold / transferred to EPCG License Holders in the Foreign Trade Policy (RE: 2008).

  • Import of Edible Oil under DFCE & TP through STC / MMTC - Instructions have been issued on 27th September 2007 and copy given to FIEO. Change of duty on import of edible oil was not agreed to.

  • Fulfillment of AU Condition – DO Letter sent to Member (Customs) with a copy to All India Rice Association clarifying the issue on 25th September 2007, copy given to FIEO.

  • Endorsement of names of new supporting manufacturers under DFCE for Status Holders and Target Plus Scheme - To be examined.

  • VKGUY for EOUs – It was clarified that for EOU exports, VKGUY benefits shall be given by DC concerned, provided the EOU does not avail direct tax benefits. A clarification to be issued.

  • Permission to surrender DFIA for purpose of regularization of Advance Authorisation - To be examined for taking up with Department of Revenue.

  • Extension of relief under Para 4.20.5 of HBP for licences issued till 31.3.2004 – To be examined for taking up with Department of Revenue.

  • Clubbing of Advance Authorisation for expired Authorizations – Not agreed.

  • Release of BG / LUT by Customs against DES & EPCG needs simplification - DoR to issue fresh instructions to their filed formations based on their circulars issued in 1997 & 2003. To take up with Department of Revenue.

  • Export Obligation – EPCG - Agreed to modify the calculation of average EO.

  • Fixation of Export Obligation – EPCG Licenses – New proposal, to be taken up for Foreign Trade Policy (RE: 2008).

  • EPCG Scheme for Project Imports – Agreed. To detail the procedure for this.

  • Eligibility and Average Export Obligation towards EPCG – Agreed.PN 53 dated 27.9.2007 issued.

  • DEPB rate for Safety Matches – PN 17 dtd 12.7.2007 – new rate 7%.

  • DEPB Application online – Agreed. PN to be issued to consider date of uplinking on DGFT website into account, for time barring period calculation.

  • Application fee for export licenses – To notify the fee for export licenses in the fee schedule.

  • Amendment in Para V of PN 79 dated 2.1.2006 - Agreed to get the same notified for post export imports by same factory. Agreed to accept ARE1 which gives "Modvat not availed" information. New name for Modvat is CENVAT, it was clarified. To take up (i) & (ii) with DoR. To issue a circular for (iii).

  • Single document clearance procedure for EOU – FIEO to give a consolidated proposal.

  • Untenable restrictions on coverage of exports under Focus Market Scheme – To examine the issue of restriction under Para 5.4 (v) for FTP (RE: 2008).

  • Individual representations from Hind Prakash, Asian Spices, Ascent Yarns Pvt Ltd. And Omni Lens Pvt Ltd. handed over during the interactive session; action will be taken by concerned ADG / JDG.

  • SCOMET items (dual use items) where end user certificate required – past performance if unblemished –credential proven – can allow on giving undertaking. Stock & Sale not allowed.

  • Problems not resolved in Grievance Committee in Baroda JDGFT office forwarded to HO still unresolved – forward to Zonal office in Mumbai first who can solve at least half of them – in HO individual officers dealing with individual subjects will clarify – those not clarified can be taken up by Policy Interpretation Committee meeting held every 15 days. Will try to resolve all issues.

  • DEPB will expire on 31.3.08 – suggestion on alternative scheme – suggestions invited on workable, viable, practicable, feasible scheme.

 

Federation of Indian Export Organisations
New Delhi, INDIA.