Some items may be decanalised

A few canalised items may be laid open for private parties and the open general licence (OGL) list is expected to be expanded in the Exim Policy for 2004-05, which is expected to be announced soon.

According to highly-placed banking sources, these will form part of the annual revisions to the Exim Policy 2002-007.

At present, canalised items are operated only by government-designated agencies.

Sources also added that tax sops were likely to be extended to exporters for setting up units under the offshore banking unit (OBU) zones, while another proposal under consideration entails abolition of licence requirements for capital goods imports and mandatory furnishing of guarantee receipt (GR) forms by exporters .

The GR form is submitted by exporters to banks explaining details of the exports and a guarantee of meeting the deadline for exports. With an appreciating rupee, exporters can look forward to some comfort from these announcements, said sources

Further, the duty entitlement pass book scheme, which is a paper entry system for exporters or importers, is also likely to be abolished so as to extend or withdraw funds from the concerned parties under export and import instead of merely making pass book entries.

Sources added that the liberalisations that were expected to come by as policy announcements are aimed at liberalising the external sector and opening up more avenues for foreign exchange expenditure. They added that this would, to some extent, solve the problem of putting into use the burgeoning forex reserves.

In addition to this, they said new announcements would be an extension of the modifications announced in the last policy.

In the Exim policy amended last year, import facilities for services companies, having a minimum foreign exchange earning of Rs 10 lakh, had been made duty free.

Last year's policy also made provisions for the corporate sector, with proven credentials to sponsor Agri Export Zone for boosting agro exports. The corporates were to provide services such as provision of pre/post harvest treatment and operations, plant protection, processing, packaging, storage and related R&D.

Duty-free import entitlement was also made available for status holders having a minimum export turnover of Rs.25 crore (in free foreign exchange). The duty free entitlement shall be 10 per cent of the incremental growth in exports and can be used for import of capital goods, office equipment and inputs for their own factory or the factory of the associate/supporting manufacturer/job worker.

Similarly, Annual Advance Licence facility for status holders was introduced to enable them to plan for their imports of raw material and components on an annual basis and take advantage of bulk purchases.

Although various norms were announced last time to help imports, the economy was favouraable to support that kind of activity, said sources. However the scene has changed today and these measures will be beneficial for capital expansion plans.

Proposed changes

• Few canalised items to be extended to private parties
• Open general licence list to be expanded
• Abolition of licence for capital goods imports and GR form submission for exports
• Tax sops for exporters setting up units in offshore banking unit zones
• Abolition of duty entitlement pass book scheme