TNC Rajagopalan: Corrections in Handbook of Procedures

EXIM MATTERS

Ten weeks after the government notified the new foreign trade policy, and the new set of procedures, the Director-General of Foreign Trade (DGFT) has issued public notices making several corrections in the Handbook of Procedures.

The status holders seeking renewal of status will be relieved that the relevant application has been amended to provide that 95 per cent payment need not be realised against exports made in the preceding 360 days. Fresh applicants can get the status even if they have not realised the 95 per cent of proceeds against exports made in the past six months.

Status holders seeking to renew or upgrade their status need not furnish bank certificates in the form given in Appendix 17-B. A glaring mistake in the said Appendix 17 B has also been rectified. Status renewal application can be made till December 31, 2004.

The amendments clarify that EPCG (Export Promotion Capital Goods) licences issued for import of spares, refractories, catalysts and consumable will be co-terminus with the export obligation period of the EPCG licence. EPCG licence applicants will have to, henceforth, inform the address of their central excise authorities. The maximum fee for the EPCG licence application will now be Rs 250,000.

The form for re-fixation of the EPCG export obligation has been amended giving effect to the provisions that where the application is made for re-fixation within two years of its issuance, the obligation shall be eight times the duty saved.

Where the remaining export obligation period of the EPCG licence is less than two years on the date of application for refixation, and the mandated block wise export obligation has been fulfilled, the obligation will be twice the duty saved on the date of issuance of licence.

The DGFT reiterates that Customs will automatically allow the clearance of goods in excess of 10 per cent of the EPCG licence value without endorsement by the licensing authority. But the heading of this provision limits the discretion up to 10 per cent of the license value.

A retrograde amendment is that manufacturer exporters, registered with the central excise, exporting since previous two years with preceding year exports of Rs 1 crore or more will not be entitled to exemption from furnishing bank guarantees under the EPCG or duty exemption schemes, if they are proprietor or partnership firms.

Now the validity of bank gua-rantees should be six months after the expiry of the export obligation period. This will make it difficult for EPCG licence holders with export obligation period of 8-12 years as banks do not give such long guarantees unless they get 100 per cent margin.

The application under the "Served from India" scheme has been amended to include details of payments received in rupees and split certificates required.

The last date of filing returns by importer exporter code holders is now December 31. Against deemed exports, the recipient units can now claim refund of terminal excise duty drawback.

A minor amendment has also been made in the bank certificate that deemed exporters have to furnish. The DGFT has also clarified that refund of excise duty will be available if supplies are made to projects financed by notified agencies or funds and additional Custom duty is zero on import of such goods.

tncr@sify.com