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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 got an order from a Sri Lanka based customer for supply of some electronic equipment, which we procure from Israel. Shall we get export benefits like DEBP if we send the equipment directly to Sri Lanka from Israel?
The DEPB benefit is given to neutralize the incidence of taxes and duties on the inputs used in manufacturing of goods from India. Therefore, third country exports, as referred by you, will not be eligible for DEPB or benefit of any export promotion scheme.
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What is the objective of Visheh Krishi Upaj Yogana and what are the criteria for the items to be included in the VKGUY scheme? On a representation made by SOPA, soybean meal and other products were included in the VKGUY list (appendix 37A). Molasses and sugar are also produced from sugarcane, but these items do not appear in the appendix 37A.
The objective of Visheh Krishi and Gram Udyog Yojana (VKGUY) schemes is to promote export of agriculture produce, including value added products, minor forest products, forest based products and gram udyog products. However, not all products falling under the above categories are eligible for VKGUY benefits in view of limited funds available under the scheme. Moreover, the products are selected on the basis of their current exports, export potential and other factors.
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We manufacture cotton yarn, fabrics, madeups and garments. What export incentives available to textile mills?
In order to improve productivity and quality of cotton for manufacture and export of competitive downstream textile products, Government has launched Technology Mission on Cotton (TMC). The Mission has achieved success in increasing the productivity and reducing the contamination through upgradation of cotton market yards and modernisation of ginning & pressing factories. The Technology Upgradation Fund Scheme (TUFS) was launched to facilitate the modernisation and upgradation of the textile industry, both in the organised and unorganized sector. For speedy modernisation of the textile processing sector, Government has introduced (w.e.f. 20.04.05) a credit linked capital subsidy scheme @10% under TUFS, in addition to the existing 5% interest reimbursement. To provide world-class infrastructure facilities to textile industry for setting up units meeting international environmental and social standards, a Public-Private Partnership (PPP) based Scheme, known as "Scheme for Integrated Textile Park (SITP)" was introduced in August 2005. In order to cater to the growing skilled manpower requirements at shop floor level, Government is providing assistance for strengthening the existing and opening new Apparel Training and Design Centres (ATDCs). Government has allowed 100% Foreign Direct Investment in the textile sector under automatic route.
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We imported capital goods under EPCG during December 2005. Is there any condition for EO fulfillment within certain period like 3 years, 5 years i.e a block period or the likes?
Exports under EPCG are subject to block-wise completion of export obligation in respect of EPCG licenses with export obligation period of 8 years. 50% of the export obligation is required to be completed in the block of 1st to 6th year and balance 50% in block of 7th to 8th year. However, for EPCG licenses where duty saved amount is more than Rs. 100 crore and which have 12 year export obligation period, 50% of the export obligation is required to be completed in the block of 1st to 10th year and balance 50% in the block of 11th to 12th year.
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How do I get to know the HS code of my export cargo?
You may log on to DGFT website www.dgft.gov.in and thereafter go to the index download. In the index, you can see the ITC HS Code for the products exported by you.
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As per Para 3.8.6 of FTP, exporters are allowed to take license for import of capital goods under VKGUY Scheme. We have one such license, but we do not find corresponding customs notification for the same. Our machine has reached the port and is awaiting clearance. Kindly clarify.
No separate notification is required for import of specified agriculture machinery and equipment allowed under paragraph 3.8.6 of the Foreign Trade Policy. Such licenses will be governed by Customs Notification relating to VKGUY scheme, which also allows import of capital goods including those, mentioned under paragraph 3.8.6 of the Foreign Trade Policy.
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In order to claim export benefit for a group company under EPCG scheme, is it necessary for the companies to have been incorporated for more than 2 years, or is it necessary for the companies to have been a part of the group company for over 2 years?
The company having EPCG Licence and the company willing to discharge export obligation should be part of group company for a period of at least 2 years.
What is the rationale behind this 2 years existence?
Apparently, the Government’s intention is to allow this facility only in genuine cases and so do not extend it to an existing company to discharge its obligation by joining another company as Group company which is otherwise exporting in a normal way.
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What is the custom notification no. for DFIA for FTP 06-07, 07-08, 08-09?
The basic customs notification relating to DFIA scheme was issued on 1.5.2006 bearing No.40. The notification was last amended by customs notification No. 63 dt. 4.5.2007.
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We are a DTA unit having an order from an SEZ Unit which agrees to pay us in INR. Can we claim drawback under section 75 of Customs Act? Can we claim advance authorisation?
You will not be entitled for drawback but you can claim advance authorisation in terms of paragraph 4.1.6 of FTP as supply to SEZ irrespective of currency of realisation is eligible for advance authorization.
Is positive value addition acceptable or do we need to have a 33% value addition as per Appendix - 11 of Handbook (Vol1)? Kindly advise.
This is not very clear from the policy or procedure and thus I would advise you to apply for advance authorization at 33%.
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I am an indenting agent in India for European textile manufacturers. Kindly guide us about the definition of the classification of export services.
You may see customs regulation relating to Export of Services Rules, 2005 that is available at www.cbec.gov.in. Check the index of Service Tax.
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A company gets an order for supplying to a contractor working for a World Bank or ADB financed project. The project authority issues a certificate mentioning the company’s name to supply the goods free of excise and customs duty. The company wants to import raw materials and get exemption on the total duty payable so that the benefit can be passed on to the customer after value addition in the company’s unit. How can this objective be achieved? Can the company get this exemption on the input raw materials? In addition, what can be availed in case the raw materials are purchased within India?
Let the company apply for advance authorisation for supply to WB/ADB project to import inputs free of any duty. If they want to purchase domestically, then they can apply for advance release order so that domestic supplier supplies at international price, as he will get excise duty refund on supplied product and deemed export drawback on inputs used in the supplied products.
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Our shipping bills are of small values between US$ 500 and USD 10000. It is very difficult to follow up with our importer for getting bill of entry that is compulsory for getting benefit under Focus Market Scheme. In spite of reminders, we are not getting their bill of entry or delivery order from the buyers.
There are many alternative documents prescribed which you can submit as proof of landing in Focus Country for claiming benefit under Focus Market Scheme.
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New DGFT office at Cuttack
Additional DGFT, Dr. S. S. Agarwal inaugurated the new office of the DGFT at Cuttack on 21st April in the presence of representatives of FIEO and other associations. The new office is located on the 5th floor of OSCI building. |
