Important Decisions at FIEO Interactive Sessions with DGFT in Chandigarh and Baddi (HP)
| S.No. | Issues raised | Comments and Action taken |
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Issues Raised at Chandigarh I. Foreign Trade Policy(FTP) related issues |
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1 |
Denomination of Export Contracts – to allow benefits under FTP for payment received in ACU $. |
It was clarified that ACU$ is equal to US$ in value and receipt and payment channeled through ACU Mechanism are deemed to have been received in US $ and therefore all exports benefits would be available to exports made under ACU mechanism |
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2 |
Grant of Duty Scrip to status Holders for Agricultural Exports @ 10% of FOB value – procedure & application needs to be notified. |
It was decided that the procedure for the facility would be finalized within two weeks time. |
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3 |
Extension of Focus Product Benefit to Floor covering under Residual Category – ITC (HS) 5705 & 5704 |
Since it was an omission at the time of last corrections in Handicraft items notified under the scheme, it was decided to issue a PN for inclusion of the product under Focus Product Scheme. |
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4 |
Problem under DFIA Scheme |
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(i) For exports without availing CENVAT facility, exemption from CVD against DFIA (whether transferred or not) should be allowed, instead of the provision of Duty DBK for the same. |
It was informed that a formulation allowing the CVD exemption in such cases have already been forwarded to DoR, who, in turn, have also consented for the same. So it was decided to take up the matter again with DoR for issuance of corresponding amendment in the Customs Notification and amendment in FTP can also be done accordingly within 2 weeks time. A meeting would be called between DGFT & Member (Customs) in this week to sort out the issue. |
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(ii) For DFIA prior to 19.4.07, imports to be permitted without any duty component. At present RAs have allowed complete exemption only for DFIAs already endorsed with transferability on or before 31.3.07. |
It was informed that since there was leakage of revenue (excise duty) in the form of double benefit, CVD exemption for CENVATable products can not be allowed beyond 31.3.07. However for cases already endorsed with transferability on or before 31.3.07, a reference would be made to DoR with facts and figures for early resolution of the stalemate in such cases. Matter would be sorted out within 15 days. It would also be discussed in the next meeting of DGFT and Member (Customs). |
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5 |
Partial redemption & Transferability of DFIA – For flexibility in operation. At times realisation takes a longer time for entire exports for shipment against a particular DFIA File Nos. |
Proposal was accepted in principle. The said facility was available during manual processing of erstwhile transferable advance licences. Software package for the same would be developed by NIC in consultation with policy division so that it becomes applicable within 15 days |
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6 |
Grant of DFIA against exports made to Russia in non-convertible Indian Rupee |
It was clarified that the said facility as applicable in case of advance authorization would also be available for DFIA. RA, Ludhiana would dispose off the pending such cases accordingly. A clarification to this effect would also be issued by DGFT Hqr. |
| 7 |
To enhance the limit of 20% of FOB value for DTA sale of Instant Tea (whereas 50% available for others) under EOU Scheme. |
FIEO would provide facts and figures from domestic concern point of view and thereafter matter would be examined by the policy division for appropriate action. |
| 8 |
Export Obligation under EPCG Scheme |
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(i) Calculation of average export obligation under EPCG Scheme – Restoration of earlier provision of average based on exports of same or similar product. |
It was informed that the matter would be discussed with Member (Customs) so that the issue is resolved within 15 days time. Issue related to maintenance of Average and the eligibility under the Scheme to be put up early to DGFT. |
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(ii) Deduction of the export value shown for export obligation fulfillment under EPCG Scheme for the purpose of extending benefits of the schemes of Chapter III related to reward/incentive schemes |
DGFT agreed to get the matter examined as it is affecting exports to FOCUS countries.
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| II. Hand Book of Procedures (HBP) Related issues | ||
| 9 |
Electronic Data Interchange (EDI) Benefits – Delay in availability of D/B details in DGFT website DEPBs in such cases may be issued based in original copies of S/Bs to be submitted by exporters in case of delay in availability of S/B details on link. |
It was informed that 95% of the E-commerce data transmission problem would be over within a short time. Help desk officials at Hqr. are available upto 7 pm on week days. A PN would be issued by Monday allowing time period for filing such DEPB application within 12 months from the date of appearance of DEPB shipping bill details in the DGFT website. FIEO would provide information on the stations where help desk facility is required within 7 days time and immediately thereafter necessary instructions would be issued by Hqr. Toll free No. would also be provided for all such centres. |
| 10 |
Delay in settlement of Focus Product Applications at Panipat office- Software non-availability. |
It was informed that the matter would be sorted out by Monday i.e, by 24.9.07. |
| 11 |
Proof of landing under Focus Market Scheme and acceptance of BRC or B/L as proof. |
It was agreed to that the facility of PN 30 dated 24.08.07 shall be extended to cover shipments from 1.4.2006 instead from 1.4.2007. FIEO would provide the alternative document for its implementation and thereafter n/a to be taken by Policy Division. |
| 12 |
Grant of DFIA – RA, Ludhiana not allowing alternative inputs without detail of inputs used available in the S/Bs. |
To decide in one weeks’ time. To put up on file.
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| 13 |
Consumable be allowed under EPCG Scheme as was available prior to 1.4.2007. |
It was decided that FIEO would provide the details for the consumables required under EPCG scheme. |
| 14 |
Fulfillment of Export Obligation under EPCG Scheme |
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(i) Chartered Accountant Certificate may be accepted for redemption of E.O. instead of the present requirement S/B copies; to dispense with the requirement mentioned in EPCG licence No. & date on S/Bs. |
It was not agreed to. However in case of bonafide mistake, such cases could be referred to RA concerned. |
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(ii) Average for Fresh EPCG authorisation to be built upon last average of EO and additional EO not with standing actual export achievements – Restoration of earlier provision |
It was informed that the issue would be examined and the matter would be taken up with DoR for early resolution within 2 weeks time. |
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(iii) Fresh EPCG authorisation to be issued only after completion of average EO of earlier EPCG authorisation – Since block year stipulation is available, earlier provision may be restored. |
It was informed that the issue would be examined and the matter would be taken up with DoR for early resolution within 2 weeks time.
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| III. General Issues | ||
| 15 |
Refund of terminal Excise Duty for domestic procurement of capital goods under EPCG Scheme: |
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(i) Non-release of funds – working capital blocked. |
It was informed that the required fund would be provided shortly for clearance of pending cases. |
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(ii) Exemption from excise duty payment on indigenous procurement facility should made available instead of refund |
Not agreed to. |
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| 16 |
TUF Scheme- operative guidelines regarding the eligibility and amount of TUF subsidy on the terms loans not yet issued by M/o Textiles |
It was informed that Ministry of Textiles have circulated a draft Cabinet Note for the purpose. However, a DO letter from DG to Secretary (Textiles) would be issued with a request to expedite the matter. |
| 17 |
(i) Help Desk at DGFT Online system – complaint No. is not being conveyed and cases are not settled. |
It was informed that official has been made available upto 7 pm on weekdays. Now the system has stabilized and complaint No. is conveyed in each & every case. Hqr would ensure un-interrupted help in the matter and take up issues with DG (SYSTEM) as well for removal of E-commerce transmission bottlenecks, if any. A copy of the representation received from M/s Sigma Freudenberg NOK, Mohali being sent) today for immediate n/a and intimation to the firm accordingly. |
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(ii) S/Bs for DEPB scheme not appearing in the DGFT website thereby leading to difficulty in filing online application. Non appearance of DEPB licences issued on the Customs site. Representation received from M/s Sigma Freudenberg NOK, Mohali on non appearance of DEPB issued to them at Customs site. |
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| IV. Individual Issues | ||
| 18 |
EO against EPCG licence of 1998 and 1999 fulfilled in Rs. terms not in $ terms – short fall in EO under 5% condonation clause to be allowed for average EO also. (M/s. Majestic Auto Limited, Ludhiana) |
It was clarified that 5% shortfall condonation allowed in the FTP is applicable to additional E.O. only and not the average E.O. Clarificatory Memorandum would be issued once the EPCG issued are settled with DoR. Since in the present case E.O. seems to have been fulfilled in Rupee terms and not in freely convertible currency terms, it was decided to take a decision in this case on file. |
| 19 |
To consider the Limited Cos. as Group Co. for the purpose of TPS benefit for 2005-06 in line with the benefit given in 2004-05. (M/s. Sportking India Limited, Ludhiana) |
M/s. Sportking India Limited, Ludhiana would apply to DGFT Hqr. with details of the case for taking a decision.
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| 20 |
Mohali Industries Association may be allowed to issue Certificate of Origin – Non-Preferential. |
It was informed to the association that they need to apply as per the ANF notified for the purpose along with required documents through the RA concerned. |
| V. Other Issues raised (Supplementary Agenda) | ||
| 21 |
RA, Ludhiana not attesting the list of spares under EPCG Schemes – Non clearance of cargo by customs thereof. |
It was decided that while in this case RA, Ludhiana may attest the list of spares for early clearance at Customs end. On Policy issue of non-requirement of attestation by RA as per existing FTP provision, it was decided to take it up with DoR. |
| 22 |
EPCG Scheme – In case of damage in CG before completion of installation, E.O. to be reduced proportionately, based on Indemnity given by licence. (Issue raised by M/s Vardaman Industries) |
It was informed that in case of occurrence of such an incidence, it may be reported to the RA concerned for taking appropriate action for relaxation of existing provision of E.O. fulfillment in such cases. |
| 23 |
ANF-8 related to Deemed Export DBK and TED refund not activated in DGFT website – Non availability of the format. Exporters using old format. |
It was informed that the required ANF would be available by Tuesday . |
| 24 |
Advance Authorisation Scheme – (i) In case of Multi-unit companies, though Advance authorisation scheme provided for transfer of inputs among the units following the Central Excise procedure, corresponding CE Notification not yet issued to make it effective. |
(i) It was informed that though the facility is available as per Central Excise Rules and Regulation, DoR would be requested to clarify the matter early to its field formations. A reference would be made to Member (Customs) by Tuesday so that the matter is sorted out within ten days time. |
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(ii) Penalty of 1% in case of valuewise shortfall being insisted by RA Ludhiana even in case of NIL export where customs duty and interest has been paid for the import made (Para 4.28 of HBP v1) |
(ii) RA, Ludhiana was informed to see the minutes of PIC Meeting dated 31-8-07 where the same was clarified. It was also decided to inform RA, Ludhiana accordingly. |
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| 25 |
DEPB benefit should be made available for supplies from DTA to units under EOU scheme in line with the facility available to SEZ units. |
Though it was informed that DEPB scheme has been extended only against realization in free foreign exchange against physical exports only, the matter would be examined in consultation with DoR. |
| 26 |
In the E.O. discharge certificate, RAs are not mentioning the details of S/Bs leading to delay in redemption of Bank Guarantee/LUT by customs. |
It was decided to issue a PN to this effect and make appropriate provision in the E.O. discharge certificate itself. |
| 27 |
Waiver of the requirement of NOC from Rubber Board in case of import of Natural Rubber under Advance Authorisation Scheme – Needs amendment of 2001 Notification. (Important to reduce delay and transaction cost.) |
Party was requested to submit detailed representation for matter to be looked into. |
| 28 |
To include Hand Tools in Focus Product Scheme. |
Matter would be examined on file. |
| 29 |
DFIA Scheme – To allow alternate inputs as in case of erstwhile DFRC Scheme (in line with Policy Circular No.30 for DFRC Scheme). |
Matter would be put up on file for issuance of appropriate clarification within a week time. |
| 30 |
Duty free import of R & D Instruments under Cus. Not No. 21/2002—Presently 120 outdated instruments mentioned therein should be replaced by the clause "Any instrument to be installed in R & D wing be duty free". (Sl. No. 3 of the suggestions given by The Amritsar Exporters Chamber of Commerce) |
Matter would be taken up with DoR. |
| 31 |
EPCG scheme should be made "0" duty scheme instead of present 5% scheme. (Sl. No. 4 of the suggestions given by The Amritsar Exporters Chamber of Commerce) |
Matter would be examined for next years’ policy. Similar request made earlier in January 2007 to DoR was not accepted by them. EPCG policy division may examine the matter for taking it up with DoR. |
| 32 |
DFIA scheme — Minimum Value Addition requirement should be brought down to 5- 10% instead of 20% at present. (Sl No. 5 of the suggestions given by The Amritsar Exporters Chamber of Commerce) |
It was not agreed by DoR. However the issue may be taken up with DoR again during Annual FTP exercise.
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| 33 |
Advance Authorisation Scheme —To amend the Cus Notn No. 43/2002 & 93/2004 to allow facility of Rule 18 (rebate of duty paid on materials used in the manufacture of resultant product) or sub-rule (2) of 19 of the Central Excise Rules. – Delay in release of bond by Customs even after EODC issued by DGFT. (Sl No. 7 of the suggestions given by The Amritsar Exporters Chamber of Commerce). |
It’s a fact that rebate should also be made available for exports under Advance Authorisation scheme. Matter may be taken up during Annual Policy. |
| 34 |
Facility of extension in EOP in case of advance authorization issued for import of Penicillin G, 6 APA & its salt. At present, under para 4.22.1 of HBP, 6 months time period is allowed as EOP and no further extension. (Sl No. 8 of the suggestions given by The Amritsar Exporters Chamber of Commerce) |
PHARMAXIL to give a detailed representation for examination for policy decision. Letter to be issued to Pharmaxil. |
| 35 |
Anomaly in the SION for Pharmaceutical products where the wastage has been fixed taking into account the most efficient process. Need for revision of SION based on average industry consumption norms. (Sl No. 9 of the suggestions given by The Amritsar Exporters Chamber of Commerce) |
Matter was discussed in the meeting and the firm M/s Parabolic Drugs Ltd, Chandigarh was informed that since I – O Norms vary from unit to unit depending on the technological efficiency and the process of manufacturing, average of the industry norms is taken in case of similar line and process of production. Firm was advised to apply in the relevant ANF with the documents prescribed therein for fixation of SION accordingly. |
| 36 |
Discharge of E.O. under EPCG scheme (Para 5.7.1 of HBP Vol. 1) – No procedure laid down for export by post parcel and the endorsement of EPCG licence No. therein. (Sl No. 10 of the suggestions given by The Amritsar Exporters Chamber of Commerce) |
Matter would be examined and put up on file by EPCG policy division for taking appropriate action. |
| 37 |
Bonded Warehouse/ Pvt Bonded Warehouse may be allowed to be specified as Port of import i.e., Port of Registration (in line with the facility available for SEZ) under EPCG scheme. (Sl No. 12 of the suggestions given by The Amritsar Exporters Chamber of Commerce) |
Detailed representation highlighting the nature of problem being faced has to be provided by the Association. Thereafter, matter would be examined and put up on file by EPCG policy division for taking appropriate action. |
| 38 |
EPCG scheme— EPCG Authorisations issued from 1.4.07 to 18.4.07 to be treated as Authorisations issued under the provisions available prior to the announcement of Annual Supplement of FTP on 19.4.07. (Sl No. 13 of the suggestions given by The Amritsar Exporters Chamber of Commerce) |
Not agreed to. Policy made applicable from 1.4.2007. |
| 39 |
Incentives should be provided to Status Certificate holders in line with the erstwhile Target Plus Scheme. (Sl No. 14 of the suggestions given by The Amritsar Exporters Chamber of Commerce) |
Association may provide detailed representation for the same for examination at the end of DGFT. We may await for suggestions to be received during Annual exercise for policy formulation. |
| 40 |
VKGUY scheme – Due to non up-dation of new product in the software for filing VKGUY scheme application electronically, manual filing of application may be allowed. – (M/s Nector Lifesciences Ltd.— (Sl No. 15 of the suggestions given by The Amritsar Exporters Chamber of Commerce) |
If there is any problem, matter would be sorted out immediately.
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| Issues Raised at Baddi (HP) | ||
| 1 |
Sunset clause for 100% EOUs may be extended beyond 31.3.09. |
Though the proposal was not earlier accepted by DoR, it may be again taken up as Pre- Budget proposal. |
| 2 |
Govt. may work out on extending Limited Hedging Concept (Time bound revaluation and protection) |
Detailed proposal needs to be submitted by the BBN Association for taking it up with the appropriate authority. |
| 3 |
Incentives should be linked to value added chain. (e.g., export of iron ore should not be incentivised) |
Presently except for agricultural products, none of the reward schemes are available for the prime raw material export. |
| 4 |
Industry to be provided finance under pre-export and post-export scheme at LIBOR |
Matter may be examined in the Next Policy. |
| 5 |
Export by road to Pakistan – to make appropriate infrastructural facility. |
To be referred to Infra Division of Department of Commerce. |
| 6 |
To include Saffron under VKGUY |
Matter would be examined by Policy Division. |
| 7 |
In case of exports by ultimate exporters: |
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(i)Though the ultimate exporter is entitled for DEPB, the supplier of packaging material to such ultimate exporter should also be entitled for deemed export benefit. |
(i)Under DEPB scheme, no such facility is available because DEPB scheme takes care of customs component of the raw material. The ultimate exporter may avail Brand rate of DBK for the excise component for the packing material as well.
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(ii) Such exports by ultimate exporter should also be counted towards fulfillment of export obligation by the supplier of packaging material against the capital goods imported by the supplier under EPCG Scheme. |
(ii)Exports by ultimate exporter would be counted for fulfillment of export obligation provided the name of the supplier is also shown in the S/B along with the file No. or EPCG Authorisation No. of the supplier unit. We may inform the Association accordingly both for (i) & (ii) above. |
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| 8 |
To allow exemption/refund/CENVAT credit of 4% SAD for inputs imported for exports – in view of the recent Notification of Customs allowing refund of this duty to traders on their re-sale and payment of VAT or sales tax. |
It was informed that the 4% SAD component is neutralized against exports in all the existing Duty Neutralisation schemes. |
| 9 |
Valuation problem in case of import of 2nd hand capital goods by the customs – not allowing the duty assessment based on the actual price in view of 1987 customs circular which allows depreciation upto 30% of the original cost of the capital goods for the purpose of arriving at applicable duty. |
Matter may be examined and put up on file so that if required, the same can be taken up with Department of Revenue for next years’ policy. |
| 10 |
Self assessment and sealing facility for export cargo should be extended by Central Excise in line with the same facility available to them in case of domestic sales. At present export cargo is required to be sealed in presence of Central Excise official only. Alternatively after payment of excise duty at the time of taking it out of factory for export, claim for refund to be filed before the Jurisdictional Excise Authority (Maritime Commissionarate). Both these procedures involve transaction time and cost. |
Procedural simplification issue. When the facility of self clearance is available for domestic sales, removal of goods for export may also be allowed to such units without the requirement of Central Excise official to be present at the time of removal. We may take up as a trade facilitation measure with Department of Revenue for next years’ policy.
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| 11 |
Non Preferential certificate of origin for Baddi-Brotiwala-Nalagarh Industries Association. |
Association was informed to apply for it with details in the ANF prescribed for the purpose. |
| 12 |
Allocation of funds under ASIDE Scheme: |
For (i) & (ii), matter may be taken up with DoC. |
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(i)Budget allocation needs to be increased for H.P. |
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(ii) Allocation should be based on future prospective export projection and not only the past export. |
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(iii) State of Origin endorsement may be made compulsory on the S/Bs for ascertaining the actual figure of exports from the State. |
It was decided that FIEO would provide inputs for true capturing of data for the purpose. |
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Short Term Refresher Programme on International Trade
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The Programme will cover:
Understanding Schemes of Managing Currency Risk in Export Transaction Specialists from IIFT, trade-related Ministries and FIEO will constitute the faculty and a Certificate will be given on completion of the Programme.
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7th FIEO-IIFT
