DEPB claims must come in 12 months

CHATROOM

According to the DGFT policy, all time-barred applications should be processed with 5% late cut.

We exported goods in November 2005 under the Duty Entitlement Passbook (DEPB) Scheme and filed our claim in June 2007. We had claimed DEPB at 5 per cent from the joint director general of foreign trade (JDGFT). Our claim was rejected on the ground that it was time barred. Can this claim be revived in the light of recent Public Notice no. 16 dated July 10, 2007, issued by the DGFT?

According to Para 4.6 of the Handbook of Procedures (HB-1), application for obtaining credit should be filed within a period of twelve months from the date of exports or within six months from the date of realisation or within three months from the date of printing/release of the shipping bill, whichever is later, in respect of shipments for which claim have been filed.

Para 9.3 of HB-1, before the amendment through Public Notice no. 16, dated July 10, 2007, stated that wherever any application is received after expiry of the last date for submission of such application but within six months from the last date, such application may be considered after imposing a late cut @ 10 per cent on entitlement.

So, I believe that the JDGFT had rejected your application because 12 months after the export plus 6 months thereafter had elapsed before you submitted your application.

After the amendment dated July 10, 2007, to Para 9.3 of HB-1, the applications can be entertained even up to 12 months after the prescribed last date for submission and even when the cut has been reduced to 2 per cent for applications submitted within six months after the prescribed last date and 5 per cent cut for applications submitted within the next six months. So, your application can be entertained till November 2007.

According to Para (2)(i) of the DGFT Policy Circular no. 8/2007 dated August 31, 2007, all time-barred, pending or rejected applications which were filed after six months from the expiry of the prescribed last date of submission of application, but are now within 12 months of the expiry of the last date of submission of application, should be processed with 5 per cent late cut. Therefore, you can ask the JDGFT to reopen your case and grant the entitlement with 5 per cent cut for late submission.

We are receiving many small value bills from our suppliers abroad on credit terms of say 60 days and we remit the interest along with the payment. Of late, we are facing a problem, as our bankers have started insisting on a chartered accountant certificate regarding TDS deductions in respect of interest payment in lieu of every import bill. Are our bankers right in asking for such certificates for every remittance?

Reserve Bank of India's AP (DIR) circular no. 3/2007-08-RB dated July 19, 2007, says that a remitter of foreign exchange is required to submit to the authorised dealer, an undertaking and a chartered accountant's certificate in the format prescribed by the CBDT (Central Board of Direct Taxes) vide circular No. 10/2002 dated October 9, 2002, at the time of making the remittance in foreign exchange to non-residents, including remittances which are in the nature of trade transactions such as import payments. So, you have to comply with your bankers' request.

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