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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 import scrap of different metals. Is there any restriction on import of such materials or are they subject to any conditions?
The import of any form of metallic waste, scrap is subject to the condition that it will not contain hazardous, toxic waste, radioactive contaminated waste/ scrap containing radioactive material, any type of arms, ammunition, mines, shells, live or used cartridge or any other explosive material in any form either used or otherwise.
Import of metallic waste and scrap in shredded form shall be permitted through all ports of India.
Import of metallic waste, scrap in unshredded compressed and loose form shall be subject to following conditions:
I) Pre-shipment inspection certificate II) Copy of the contract between the importer and the exporter stipulating that the consignment does not contain any type of arms, ammunition, mines, shells, cartridges, radioactive contaminated, or any other explosive material in any form either used or otherwise AND III) Import of scrap would take place only through Chennai, Cochin, Ennore, JNPT, Kandla, Mormugao,. Mumbai, New Mangalore, Paradip, Tuticorin, Vishakhapatnam, ICD Loni, Ghaziabad, Pipapav, Mundra, Kolkata, ICD Ludhiana, ICD Dadri (Greater Noida), ICD Nagpur, ICD Jodhpur, ICD Jaipur, ICD Udaipur, CFS Mulund, ICD Kanpur, ICD Ahmedabad, ICD Pitampur and ICD Malanpur.
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We have exported a shipment but the payment has been realised by a third party. On SDF, invoice, bank certificate, the third party’s name is mentioned. Is it possible to obtain VKGUY in third party’s name or can the VKGUY application be filed by us only? The DEPB has been issued in our name.
At per current provisions, in case of third party exports, VKGUY can be claimed only by the party, which realizes foreign exchange. However, FIEO has requested for permitting either of the two parties to claim the VKGUY benefit based on disclaimer given by the other. Our request is yet to be considered.
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Is there any provision for extending the validity of Target Plus Licenses?
Please see Public Notice 113 issued on 15th Feb 2008 by the DGFT allowing revalidation. PN 113 reads: "Over and above the extended validity granted automatically, vide Public Notice No 29 (RE-2007)/2004-09 dated 24.07.2007; maximum two revalidations, for one year each from date of expiry, are allowed. Application for revalidation may be made to RA concerned."
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What is the penalty for shortfall in Export Obligation (EO) under EPCG?
You have to pay the part of customs duty saved with 15% simple interest. For example, if you have fulfilled EO for 60%, then 40% of the duty saved with 15% interest needs to be paid.
In case we have been issued two licences during the same financial year, then will the average obligation remain the same and to be fulfilled under one licence only?
Average will run concurrently against all the EPCG licences.
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I would like to know if deemed export supplies in last three years shall be added in export performance for calculation of average export performance in EPCG or not.
Yes, since deemed exports are also counted for discharge of Export Obligation under EPCG, the same is also added while computing annual average under EPCG Scheme
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For deemed export drawback (at All Industry Drawback rate), we completed supply against a contract in last June but we are yet to receive 10% payment. Can we apply for full DBK on the basis certificate for 90% payment?
You can apply for full DBK. However, since you have received only 90% of payment, the DGFT office will restrict it to 90% of claimed DBK.
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Can we reduce the value of an invoice after it is sent for collection?
You can reduce the value upto 10% of invoice value subject to the conditions that the exported commodity was not subject to floor price, that the exporter is not under caution list of RBI and that the proportionate export incentives availed on such value are surrendered. However, exporters in export business for more than three years are not subject to 10% restriction and can give reduction without limit, subject to stipulated conditions.
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We are a Mumbai based merchant exporter of textiles and readymade garments. If we purchase readymade garments from factory premises of Tirpur in Tamil Nadu, then do we require paying any excise duty at the time of taking delivery from Tamil Nadu for our Mumbai godown?
There is an excise duty of 8%, but it is optional and applicable only when a garment unit opts for it. But if the manufacturer is availing CENVAT, then he will have to pay this duty.
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If I export in Indian Rupee, will I be eligible for export incentives?
Yes, if it is invoiced in Indian rupees to a country in General Currency Area.
Where will I get the list of countries in general currency area?
All countries other than Nepal, Bhutan and former USSR fall under General Currency Area.
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Our company is into multi-product exports. We intend to start exporting services as well. What is the procedure for the same?
Please refer Export of Services Rules, 2005 notified by customs and benefits to service sector in the form of EPCG and SFIS.
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Can we apply for EPCG License for importation of spares exclusively? If yes, then what will be the EO? Is it only 8 times the duty saved? Or, do we need to maintain last three year’s average exports also?
You can apply for EPCG licence for import of spares exclusively at concessional duty of 5%. In such case, you will be required to undertake an export obligation equivalent to 8 times the duty saved in addition to average level of exports maintained by you in preceding three licensing years.
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We are realizing export proceeds through bank. Some of the bankers say that after getting payment we can send the documents directly. I sent an email to RBI seeking clarification in this regard, but we have not received any reply. Can you guide us?
As per the RBI regulation released on 1-7-08, in case of 100% advance remittance, the document in respect of goods exported can be sent by the exporter to the consignee.
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Under the provision of 8.2C, the benefits are covered under 8.3C of the Foreign Trade Policy. Who will provide refund of terminal excise duty - DGFT or Central Excise? According to Para 8.6 of HBP, the application for refund of TED should be made to the regional licensing authority? What is regional licensing authority?
Refund of excise duty is given by the licensing authority of DGFT except for the supplies to EOU/SEZ where it is given by the Development Commissioner having jurisdiction over SEZ/EOU. The licensing authority refers to DGFT office under whose jurisdiction supplier’s factory or registered Head Office is located. The jurisdiction of these authorities can be found in Appendix 24 of the Handbook of procedures (Vol.1).
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What is the difference between Invalidation Letter (used for getting the supply from indigenous sources against an Advance License) and Advance Release Order?
Invalidation letter is normally used when a domestic supplier also wants to import his inputs without paying customs duties. ARO is sought in cases where the domestic supplier wants refund of the duties already paid on the inputs used in the export product.
In case of Invalidation Letter, the domestic supplier gets exemption from excise and import duty free inputs. In case of ARO, he is entitled for refund of duty. Which of the two is preferable?
It is the choice of the domestic supplier to use either of them. If the duty paid inputs exist in his inventory, then he may use ARO and apply for refund. Otherwise, he has the option to import inputs without paying any duty.
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We are a partnership firm and our chairman is having a proprietary firm also. Can we fulfill the export obligation of our company through export from the proprietary firm as a group company?
The definition of group company applies to companies falling within a group and therefore the benefit cannot be extended to proprietorship or partnership firms.
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