The Director General of Foreign Trade (DGFT) has mooted a “trust-based system”, agreed jointly by the Government authorities and exporting community.
The proposed system would pave the way for reducing voluminous paper work and transaction cost involved in redemption of advanced authorisation licenses, according to a senior official from DGFT.
In an interaction with members of Federation of Indian Export Organisations (FIEO) at Chennai Anup K Pujari, DGFT said, “we are making some attempts on this direction, we are consulting with the trade community and it will be possible that both the government and export community could work together to move to this trust-based system.”
He added, the system will reduce the paper work and would help to complete work quickly, while on the other side in the case of ‘mistrust’ it will attract huge penalties.
“Once we get the full details we will be able come out with some system for this.” Currently the paper work has to be carried out in the case of Export Obligation Discharge Certificate (EODC) and takes place both in the case of advance licenses and export promotion capital goods scheme (EPCG) licenses.
“Exporters have to file large volume of documents for redemption of advance authorisation cases, first with licensing authorities and again with the customs. This result in dual work for the exporters and increase their transaction cost and time,” said Ramu S Deora, president, FIEO.
Responding to which, Pujari suggested that a trust-based system involving a certification process by a statutory chartered accountant instead of submitting voluminous documents to help the export community save time and costs. Deora also suggested Director General of Foreign Trade that the exporters are signing bond with customs, central, excise, service tax and DGFT authorities, among others for every shipment. Since all authorities are now on EDI (electronic data interchange), they should take only single bond, which will benefit them as well as exporters.
He also sought extension of interest subvention scheme by one more year and lower credit facilities for exporters.