The application fees for duty credit scrips have been reduced from Rs. 5 to Rs. 2 per thousand. For those who file electronic applications and transfer the fees electronically, the fees would come down to Re. 1 from Rs. 2.50 per thousand.
The maximum and minimum fees have been left unchanged. Yet, one of the exporters, who exports about Rs. 100 crore under DEPB (Duty Entitlement Passbook) scheme called in to say that this step alone will save him over Rs. 1 lac in an year.
The Minister said that advance authorisation scheme and EPCG Scheme will be brought under the EDI (Electronic Data Interchange) system with effect from 1.7.2008. This could mean doing away with verification of shipping bill particulars in the export obligation discharge certificates and quicker release of bonds and bank guarantees.
An exporter who has about 50 shipments each month under advance license scheme pays Rs. 1000/- for each shipping bill verification and, his costs would come down by about Rs. 6 lakh in an year.
With effect from 1.1.2009, all existing EDI ports will be treated as a single port and there will be no requirement of TRA (Telegraphic Release Advice) under Advance Authorisation, said the Minister. Getting each TRA costs, on an average, Rs. 1000/-, say the exporters.
They hope that even under EPCG (Export Promotion Capital Goods) scheme and other duty credit schemes like the DEPB (Duty Entitlement Passbook) scheme, similar facility will be made available quickly.
However,minister must realise that the Regional offices of the Director General of Foreign Trade (DGFT), where corruption is rampant, are a major source of transaction costs. He must examine how Information Technology can be used effectively.
The Minister can examine why there should be any need to obtain paper scrips at all. Can the DEPB credits not be given electronically after the 'let export' order is given? If banks can put in software to transfer billions of dollars electronically, can the transfer of duty credits be enabled through digital signatures?
Even under advance authorisation scheme, the Commerce Minister can ask the Finance Minister to introduce an element of competition by allowing the excise department to issue import procurement certificate as per Standard Input Output Norms for duty free imports that the Customs will honour and let the excise department monitor the export obligation fulfilment.
Necessary legal framework to put in place the procedures is already available under Customs (Import of goods at concessional rate of duty for manufacture of excisable goods) Rules, 1996. All it needs is a suitable exemption notification.
The Commerce Minister must act quickly to dispel impressions that he does not bother much about unbridled corruption in the licensing offices. Otherwise, he will lose much of the goodwill his work has generated.
