Simplify EPCG authorisation

CHATROOM

Para 5.8.6 of the Handbook of Procedures says, "in case of an existing export obligation under EPCG licence scheme a fresh EPCG authorisation can only be issued provided average of last obligation( including increased amount due to duty saved in last EPCG) has been maintained."

This is a very confusingly worded provision that I think even the licensing authorities do not understand. Even so, I think in the case of newcomers, the issue is quite clear that they have no previous exports and so, the average exports to be maintained can only be zero for the EPCG authorisations issued or to be issued in the first year.

I am of the view that the Director General of Foreign Trade should quickly clarify the position or better still, scrap this provision because even established exporters can have a bad year when they fail to achieve even the annual average stipulated in respect of EPCG authorisations issued earlier.

Please advise whether commission received by a General Sales Agent (GSA) from foreign airlines, paid out of foreign airline's QA22 Bank Accounts in India (i.e INR sales account in India convertible in foreign exchange), will be regarded as receipt in convertible foreign exchange for the purpose of service tax liability of the GSA, in respect of services rendered before 14.03.2005?

In my opinion, Indian rupees received from a QA 22 account is not the same as receiving payment in foreign currency and therefore, the exemption from payment of service tax available under notification no. 21/2003-ST dated 20.11.2003 will not be available in this case. However, I am of the opinion that the issue is worth representing to the Central Board of Excise and Customs.

Can one SEZ unit receive remittance in foreign currency from another SEZ unit? What are the mandatory banking requirements for the same?

In my opinion, one SEZ unit can receive payment in foreign exchange from another SEZ unit provided the payment is for a current account transaction and the payment is made from a foreign currency account and received through normal banking channels.

In case, we pay any extra customs duty against customs receipt in lieu of bill of entry, can we take Cenvat credit of the same?

You can take the credit in terms of explanation to Rule 9 (1) (b) of Cenvat Credit Rules, 2004, which says that 'supplementary invoice shall also include challan or any other similar document evidencing payment of additional amount of additional duty leviable under section 3 of the Customs Tariff Act'.

Is high seas sales legal?

Para 2.24 of the Foreign Trade Policy allows High Seas Sales.

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