 |
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. |
What is ACU and which countries are covered for payment clearance under it?
The Asian Clearing Union (ACU) was as a step towards securing regional co-operation. The ACU is a system for clearing payments among the member countries on a multilateral basis. Iran, India, Bangladesh, Bhutan, Nepal, Pakistan, Sri Lanka and Myanmar are the members of ACU.
How ACU transactions are settled?
The Asian Monetary Unit is the common unit of account of ACU and is equivalent in value to one US dollar. The Asian Monetary Unit may also be denominated as ACU dollar. All instruments of payment are required to be denominated in Asian Monetary Unit. Settlement of such instruments may be made by authorised dealers through operation on ACU dollar Accounts.
What payments can be made from EEFC Account?
EEFC Account can be used for (a) payment outside India towards a permissible current account; (b) payment in foreign exchange towards cost of goods purchased from a 100 percent Export Oriented Unit or a Unit in SEZ, EHTP, STP and payment of customs duty can be made from EEFC Account; (c) trade related loans/advances, by an exporter holding such account to his importer customer outside India; and (d) payment in foreign exchange to a person resident in India for supply of goods/services including payments for airfare and hotel expenditure.
****
We are an export unit located in Domestic Tariff area (Noida). Our export constitutes 95% of our total turnover. Do we qualify to become an EOU? Do we need to take some permission to get our unit recognized as EOU? Please clarify.
You have to get separate recognition as an EOU from the Development Commissioner. Unless you are recognized as an EOU, you cannot get facility of EOU despite exporting 100% of your production.
How can we get EOU status for our unit?
You may apply to the concerned Development Commissioner in the format given in the appendix of the Handbook of Procedure.
****
Our client wants to convert its unit into an EOU. His investment in plant & machinery is already over Rs. 100 lakh. Is he required to make additional investment of Rs. 100 lakh to become an EOU?
Since no benefit on existing plant & machinery is available upon conversion, you may have to make fresh investment in plant & machinery for Rs. 1 crore.
But Para 6.6(c) of FTP says that for the existing units and STP units, this investment criteria of Rs. 100 lakh is not applicable.
I interpret it as referring to existing EOUs and not DTA units, which may have investment of less than Rs 1 crore.
****
We are a resort having duty free credit scrip issued under Served From India Scheme (SFIS). Can we use the scrip for import of cement?
No. Scrip issued under SFIS can be used for import of capital goods including spares, office equipment and professional equipment, office furniture and consumables related to the services rendered by service providers. SFIS cannot be used for import of cement.
For how long do we need to maintain old record of DGFT as per the 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 authorisation, the record is to be kept for a period of 3 years from redemption of a case. For imports with actual user condition, it is 3 years reckoned from the date of imports. You may see the scheme specific retention period under different Chapters of the Handbook.
What is the minimum investment on plant & machinery required for an EOU? What is positive NFE?
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 earn foreign exchange for the country. In other words, your fob value of export should be more than the import value + royalty + commission etc.
Is there any duty concession for import of Walnuts (shelled and un-shelled) 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 Walnuts, shelled and un-shelled falling under ITC(HS) Code 08023200 and 08023100 respectively, 50% concession on applicable basic customs duty is available. The notification is available at www.cbec.gov.in.
Under which customs notification can goods be imported for ATA Carnet?
Import of goods for ATA Carnet is allowed under customs notification no.157 dated 28.3.90. Under this 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.
Do we need to give bank guarantee for imports under ATA Carnet?
Since FICCI is the 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.
Our Company wants to export goods to US for US$ 12,000/without GR declaration but customs is 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. Department of Revenue has also issued Circular (number 53/2004, dated 13th Oct, 2004) allowing the above facility. You may produce a copy of this circular to Customs. The circular is available at www.cbec.gov.in.
We want to know if exporters are required to pay service tax on inland transportation of goods for export. We are asking our C&F Agents not to charge service tax on transportation of goods but they are insisting for payment of service tax and not providing exemption. Kindly suggest what I should do. Please inform if the said exemption is applicable for us or not.
Budget 2008-09 provides that service tax will be levied on 25% of the freight value and not on 100% of freight value as existed. You may pay accordingly and claim refund. The details of refund procedure is given in service tax notification 42/2007.
****
We are manufacturing industrial textiles and we are registered under Central Excise Act. We have been availing Cenvat Credit on whatever raw material we purchased and we are also paying the applicable duty. We make synthetic and cotton fabrics and sell them to industries. Can we avail duty drawback at lower rates?
Drawback has two portions - one when you don’t avail CENVAT and the other when you avail CENVAT. Since you avail CENVAT, you can claim the other portion, which is on a lower side.
Can we get DEPB license? Or, is it only for those who do not avail CENVAT?
Since DEPB only factors basic customs duty, you can claim DEPB with CENVAT also.
We made some exports in 2008 without mentioning DEPB or Duty Drawback in the invoice. Now we are told that no conversion is allowed. Can we get the benefits of DEPB in any manner?
No. Conversion of shipping bill is not allowed after Jan. 2004.
****
Where can we get the list of products and markets under Focus Product and Focus Market schemes? We are a merchant exporter of granite and construction machinery. We have exported granite and construction machinery to Nairobi (Kenya) and Uganda. We want to know if we can get benefits of either of the above-mentioned scheme.
Please see chapter 3 of Foreign Trade Policy at www.dgft.nic.in. You may get Focus Market benefit for exports to Uganda as it is covered under the scheme given in Appendix 37-C. Neither of the two products exported by you is covered under Focus Product Scheme.
****
Our unit holds IEC and is registered as a Star Status House. It is a proprietary concern seeking to convert into a partnership one. Can I retain my star status despite conversion?
You can retain the status. A unit is permitted to retain star status despite change in the nature of ownership.
