Exporters interact with DGFT team at Pune, Mumbai
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Mr. R S Gujral, DGFT (5th from left) addressing the meeting. With him are, from left, Mr. Ajay Sahai, Director General, FIEO; Mr. S S Sandhu, Zonal Jt. DGFT; Dr. Shyam Agarwal, Addl.DGFT; Mr. S.K.Saraf, Chairman, FIEO(WR); Mr. Ganesh Kumar Gupta, President, FIEO; Mr. Tapan Majumdar, Jt. DGFT; and Mr. A K Singh, Jt.DGFT. |
A DGFT team led by its chief Mr. R. S. Gujral visited Pune and Mumbai to seek inputs from the exporters of Western Region for the next Annual Supplement to the Foreign Trade Policy which is usually announced towards the end of the financial year. FIEO organised the interactions of the DGFT team with exporters at Pune on 17th and at Mumbai on 18th December.
During these interactions, Mr. R. S. Gujral observed that the burning issue for the exporters today was reduced profitability under stronger rupee and said that the DGFT was seeking sector-wise export data to ascertain the impact. He is of the view that the products which enjoy monopoly or higher profit margins are not affected much.
Explaining the position of the Department of Commerce on various suggestions made by the exporting community to mitigate the impact of stronger rupee, Mr. Gujral said there were certain constraints in raising the DEPB or Drawback rate which had come down with the reduction in customs duties. "Any difference in actual refund rate will be treated as incentives by WTO," he said.
On dual exchange rate, he said the government was not willing to introduce it and the exporters had to resort to alternative assistance through hedging, factoring, invoicing in other currencies like Euro, Sterling, Yen, etc.
With respect to the continuity of DEPB Scheme, Mr. Gujral said a proposal had been placed before the Cabinet for an alternate scheme containing provisions for rebate of state taxes & duties as well. In case the alternate scheme is not approved, said Mr. Gujral, then the existing DEPB scheme would continue till the GST becomes operational in 2010.
On abolishing threshold criteria for eligibility under MDA Scheme, he requested FIEO to submit a paper to the DGFT. Mr. Gujral concluded saying that many grey areas in Foreign Trade Policy had been removed and for the remaining areas the DGFT was seeking necessary clarifications from various other departments.
Pune exporters pointed out that since last 6-7 years there had been no downward revision in the value addition criteria laid down for calculating DEPB rates. On this, Mr. Gujral clarified that since the scheme was coming to an end by the current fiscal, such revision was not required. He, however, added that in the event of extension of DEPB scheme beyond the current fiscal, the DGFT would look into the issue of downward revision of value addition norms.
On exporters’ request for streamlining the guidelines for refund of drawback in cases where export payment has not been realized within 180 days as different banks follow different procedures, Mr. Gujral assured that the matter would be taken up with the Department of Revenue and also with the RBI.
On splitting of DEPB scrips (partial transferability), Mr. Gujral revealed that the required software had been prepared and was under testing, but he assured that the exporters would get it as a New Year gift from the DGFT.
On amendment /reduction in value of DFIA at the time of transferability, Mr. Gujral promised to issue a clarification.
On other issues like introduction of EPCG Zero Duty Scheme, considering EOUs & STPs at par with respect to sourcing of capital goods, inclusion of DFRC holders under Served from India in Para 6.9 (a), etc. he assured to take a considerate view.
A number of EOUs present in the meeting said they can survive without IT benefits if some of their issues were resolved. Otherwise, they said, "Give us dignified exit." They pushed for removal of Sunset Clause under Income tax Act and also stressed on removing physical examination of every inputs acquired by them. They also raised concerns over self-bonding facility given to only select EOUs.
Vice President of Mahratta Chamber of Commerce Mr. Mukesh Malhotra raised the issues faced by his members. With respect of sale of diesel set, he said, it is treated at depreciated value as it is not considered as scrap for domestic market and so does not amount to partial debonding.
On e-filing, he said as per the Trade Notice issued by Jt. DGFT, Mumbai, hard copies are required only for Para 2.7 as all details are not given in application of advance licence. "Why two hard copies are required along with e-filing for other applications, he wondered.
He further said that the customs insisted on separate NOC under each scheme which was not accepted by the excise department. He said, if the excise department does not issue such NOC within two weeks, then it should be treated as deemed issued and ARE-1 should be considered enough to meet the purpose. Mr. Gujral requested DG, FIEO to look into the matter and submit a note to the DGFT in this regard.
Other suggestions made by Mr. Malhotra were:
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VKUY - Chap.21 may be added
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Help desk should be made operational in Mumbai
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Under Advance Authorisation, new provisions should be incorporated allowing local vendors to get necessary documents to be signed by excise department as taking goods back from supplier’s factory only for excise clearance and then to docks was causing unnecessary delay.
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All EDI ports should be treated as single port for duty free advance licences.
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DGFT insists on BRCs to be converted into US$ when invoice is in any other freely convertible currency. This increases avoidable clerical work. Cross conversion in BRC should be avoided.
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Excise department does not issue Installation Certificate for EPCG Licence holders. For status holders, self declaration should be allowed.
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Once the average export performance is fulfilled, no additional obligation should be imposed for importing spares as they are capital goods.
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FIEO Registration should be enough for multi-product exporters instead of insisting on additional RCMC from Export Production Council for main line of business.
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For paper based product, realization period of 180 days should be extended to 9 months.
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Sister group co. should be allowed to use EPCG licence.
Earlier, Mr. S.K. Saraf, Chairman, FIEO(WR) requested the captains of the industries to come forward to boost agriculture exports from the State of Maharashtra for the benefit of small farmers. He also briefed the audience on the proposed opening of India Trade Centre at Bucharest, Romania; booklet of which was distributed among all the participants.
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A view of the participants. |
In Mumbai, FIEO President Mr. Ganesh Kumar Gupta said that despite considerable efforts being made to facilitate exports through policy framework, certain bottlenecks such as infrastructure problems, imposition of service tax and fringe benefit tax continued to persist. He thanked the DGFT for extending additional DEPB & DBK to a few sectors but requested him to extend the same to all exporters across the board.
Reiterating some of the longstanding demands of the Federation, FIEO Chief made following suggestions:
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Protect the exporters against very high volatility of Indian Rupee by way of fixing the value of dollar on quarterly basis for export purpose only. The exporters account be credited with the so fixed exchange rate and the gain due to rupee depreciation should be pooled in an exchange neutralization fund which can be used when there is rupee appreciation. If there is no balance in the fund, the government may provide replenish it.
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Exempt output services tax like commission to foreign agents, overseas travel expenditure, professional fees, fees to CHAs, courier charges, bank charges, warehouse charges, inland haulage charges, etc. The Commerce Minister had announced to provide refund of service tax but the same had not been implemented.
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The benefit of subvention of 2% in export credit announced by RBI should also be extended to non-SME units in other sectors like Pharma, Gems & Jewellery.
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RBI stipulated higher rate of interest for post-shipment credits if the tenor of the bill was longer or they were not paid on due date. Few exporters who were speculating with higher exchange rate earning were discouraged, as they were obliged to pay much higher interest for delay in payments.
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Banks should offer PCFC in other major currencies also, like Euro, Pound Sterling and Yen to make the export sector better placed in a competitive environment.
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Given the appreciation of rupee, the earlier scheme of "Export Profit Reserve" should be reintroduced. Exporters should have the option of maintaining export profit reserve upto 50% of their annual gross profit.
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Corpus of Funds be earmarked to identify labour intensive sectors by providing additional drawback/DEPB/any other alternative route, since the government has been extending employment in the rural sectors under the National Rural Employment Guarantee Programme (NREGP)
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All exporters should be made eligible for MDA benefit without any threshold criteria.
Mr. Gupta further added that the ECGC should come out with a special scheme covering exchange risk for small & medium exporters. The suggestion was appreciated by Addl. Secretary, MOC.
Mr. S K Saraf, Chairman, FIEO (WR) highlighted that a major problem being faced by the exporters was delay in issuing circulars by Finance Department and sought necessary intervention of the DGFT in this regard.
The DGFT team included Dr. Shyam Agarwal, Addl. DGFT, Mr. Tapan Majumdar, Jt. DGFT, Mr. A K Singh, Jt. DGFT, Ms. Sangeeta Singh, Jt.DGFT, Mr. S S Sandhu, Jt. DGFT, Mumbai and Mr. K L Sharma, Jt. DGFT, Pune. The agenda points were taken up for discussion by Mr. P.C. Nambiar, Chairman of Foreign Trade Regulations Sub-Committee of MCCIA who was duly supplemented by FIEO Director General Mr. Ajay Sahai.
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ePayment for eTrade
A meeting on ePayment for eTrade project was held on 20th December at New Delhi under the chairmanship of Mr. G. K. Pillai, the Commerce Secretary. Important decisions taken at the meeting are:
NET BANKING
DRAWBACK PAYMENTS
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