Advance licence norms may be amended

RUN UP TO THE FOREIGN TRADE POLICY

The commerce and industry ministry is considering amendments in the advance licence norms to allow exporters to transfer their licence or materials imported duty-free after completing their export obligations.

Advance licences are used for duty-free imports of inputs used for manufacturing export products and are exempt from basic Customs duty, additional Customs duty, education cess, anti-dumping duty and safeguard duty.

These licences are at present not transferable even after the completion of the export obligation. The licensee has only the option to dispose of the product manufactured out of the duty-free inputs after the export obligation is completed.

"This restriction proves to be a deterrent to exporters to source goods for exports from various sources," an official said adding that allowing transfers would attract more users under the advance licence system and push up merchandise exports.

The move will also bring the advance licence scheme on a par with other duty neutralisation schemes like the Duty Entitlement Passbook Scheme and the Duty Free Replenishment Scheme, which are transferable.

Officials said the ministry was also considering relaxing fulfillment of export obligations under the Export Promotion Capital Goods Scheme. At present, the export obligation is 50 per cent during the first six years and the remaining 50 per cent in the 7th and the 8th year.