We export our goods through merchant exporters. Can we claim the benefits under Chapter 3 of the Foreign Trade Policy (FTP)?
As per Para 3.17.10 of the FTP, “transfer of export performance from one to another shall not be permitted. Thus, a shipment bill containing name of applicant shall be counted in export performance/turnover of applicant only if export proceeds from overseas are realised in applicant’s bank account and this shall be evidenced from BRC/FIRC. However, for VKGUY, FMS and FPS (including MLFPS), benefits can be claimed either by the supporting manufacturer (along with disclaimer from the company/firm who has realised the foreign exchange directly from overseas) or by the company / firm who has realised the foreign exchange directly from overseas.” Therefore, you can claim the benefits that are specifically allowed.
We have not been calculating education cess and secondary higher education cess for the third time (i.e., after arriving at the excise duty equivalent to customs duty payable) on clearances to Domestic Tariff Area (DTA) from our Export Oriented Unit (EOU), as per the Tribunal judgment in the case of Sarla Performance Fibre Ltd. [2010 (253) ELT 203 (Tri. Ahmd). Although we showed this judgment to the audit party, they are still demanding the cess. What is the correct position?
The above judgment did not overrule the judgment by the same Ahmedabad Tribunal in the case of Sarla Polyesters [2008 (226) ELT 238 (Tri. Ahmd), wherein it was held that cess is payable. In the case of Indo Farm Tractors & Motors Ltd. [2008 (222) ELT 184 (HP), the High Court had held that cess is payable. In view of the contradictory judgments, the matter has now been referred to a Larger Bench in the case of Kumar Arch Tech Pvt. Ltd. [2011 (273) ELT 574 (Tri. Del)]. So, the issue is far from finally settled.
Last year, goods manufactured by us were exported through an export house and on such exports, this year, the export house has claimed duty credit scrips under one per cent Status Holder Incentive Scheme (SHIS). Does it mean that we are barred from claiming zero duty EPCG (Export Promotion Capital Goods) authorisations this year?
As per Para 5.1A of the Handbook of Procedures, Vol. 1, zero duty EPCG scheme shall not be available to applicants, who avail in that year, the benefit of SHIS under Paragraph 3.16 of FTP. This means that the applicant for zero duty EPCG authorisation alone is barred from claiming SHIS in the same year. The application forms ANF 5A and ANF 3E also bar the applicant from claiming both the benefits. So, if you claim zero duty EPCG authorisation this year, you are barred from claiming SHIS benefit this year but the export house that exported the goods you manufactured is not barred from claiming SHIS benefit this year, on that account, so long as the export house does not claim zero duty EPCG authorisation in the same year.