Govt banks on tech to save time, lowers fees

ANNUAL SUPPLEMENT TO FOREIGN TRADE POLICY 2004-09

New system to end Physical verification by officials.

Addressing a long-pending demand of exporters, the commerce ministry today simplified procedures to bring down transaction costs and time.

A key step in this is inclusion of the Advance Authorization Scheme and the Export Promotion Capital Goods (EPCG) scheme in the electronic data interchange system from July 1. As a result, the practice of physical verification and registration by Customs officials will end.

These schemes are used by exporters to avail of duty benefits for importing goods that are used to make items for exports. Also, more ports have been included under export promotion schemes.

Moreover, the application fee for duty credit scrips and EPCG authorisation has been reduced from Rs 5,000 to Rs 2,000. The fee for getting the exporter-importer code has been reduced from Rs 1,000 to Rs 250.

Also, the fee for filing supplementary claims on different export promotion and duty remission schemes has been reduced to 2 per cent from 10 per cent.

In addition, exporters importing capital goods through the EPCG scheme will be able to pay the duty by debit of the

Duty Entitlement Passbook or other duty credit scrips. As a result, exporters can use the DEPB scrips more effectively while sprucing up their manufacturing facilities.

Manufacturing units importing duty free research and development equipment and not registered with the central excise authorities can now simply obtain an installation certificate from an independent chartered engineer.

At present such units are required to get the certificate from the excise department. As a result, small manufacturing farms will have easier access to research equipment.

Moreover, the cap on the duty free import of samples has been increased from Rs 75,000 to Rs 1,00,000. Limit for jewellery parcels sent through the foreign post office has been increased to $75,000 from $50,000.

"Every now and then, I come across surveys by reputed international and domestic organisations pointing out the distressing fact that transaction costs "" in both money and time "" for exporters are very high in India," said Commerce Minister Kamal Nath.

Transaction costs account for up to 3 per cent of the freight-on-board value of exports and eat into the competitiveness of Indian exporters.

"Significantly, timelines have been drawn up for many excise-related clearances and certifications. This would certainly bring down delays, which in some cases go into months," said KT Chako, director, Indian Institute of Foreign Trade.

However, some trade analysts pointed out the need to further strengthen the stability of the trade policy. "Many DGFT notifications come with prospective effect, which does not reflect well. There should be some guidelines on what procedure should be followed regarding this," said Arun Goyal, a Delhi-based trade expert.