We export under Duty Entitlement Passbook (DEPB) scheme. Our Customs House Agent (CHA) says there is a limit of 12.5 per cent for remitting agency commission. Is that so? Is there any compulsion that whatever we declare as commission in the GR/SDF form must be remitted?
There is no limit for remitting foreign agent’s commission. It should be appropriate to the line of business. In some businesses, even 40-50 per cent commission is not unusual. The commission to be remitted must be declared in the GR/SDF form. Even if it is not declared, the banks can allow remittance on the basis of the agency agreement. For claim of DEPB, the limit for agency commission is 12.5 per cent. It means that even if you pay more commission to the agent, DEPB benefit will be available only to the extent of 12.5 per cent of FOB value. It is not uncommon for exporters to negotiate with the agent and pay lesser commission (than what is declared in the GR/SDF form) after realising the payment and after obtaining the bank certificate of exports and realisation. So long as you have claimed DEPB only on the FOB value inclusive of the actual commission (maximum 12.5 per cent), there is no problem.
Can we import fuel under Para 4.7 of the Handbook of Procedures, Vol. 1 (HB-1) - i.e., when we apply for advance authorisation for items for which standard input-output norms (SION) are not fixed?
This was not allowed earlier. But, a recent amendment (DGFT Public Notice no. 66 dated 19th May 2010) to the General notes to the Fuel in the SION book (HB-2) says import of fuel shall also be permitted under Paragraph 4.7 of HB-1, as per the entitlement under “General Note for Fuel”. It also says in case of DFIA, import entitlement for fuel as per SION may be transferred only to companies, which have been granted licences to market fuel by the Ministry of Petroleum and Natural Gas.
We have made an import contract for 100 metric tonnes (MTs), with a shipment schedule of 10 MTs every month. Our first consignment has come and our CHA says the Customs, based on import price of others for 10 MTs, are not accepting our price. How to contest this?
In business, it is quite normal that price for 100 MTs order is less than the price for 10 MTs order. Since your price is for 100 MTs but import has taken place for only 10 MTs, the Customs need to be sure that your price is accepted only when 100 MTs imports take place. You can ask the Customs to register your contract for 100 MTs and grant provisional assessment for every import of 10 MTs till all the scheduled shipments are completed. Thereafter, you can tell the Customs that entire 100 MTs have been imported and that all the previous provisional assessments must be finalised on the basis of your contracted price.