The finance ministry has allowed removal of goods to duty-free shops at international airports without excise duty payment for sale in foreign currency to international travellers. Earlier, duty on only some electronic goods was exempted for sale through such shops. So, such shops mostly contained only foreign goods.
To give effect to this very welcome provision that will help domestic manufacturers, the government has notified such duty-free shops or godowns as export warehouses, waived the registration requirement for these and exempted the goods cleared to such warehouses on which excise is legally leviable. The Central Board of Excise and Customs (CBEC) has issued circular 970/04/2013-CX, dated May 23, prescribing the conditions, limitations, safeguards and procedures for removal of such goods to godowns or retail outlets of duty-free shops at international airports, to which the warehousing provisions have been extended. Travellers going abroad or returning to the country can now hope to see India-made goods along with foreign ones in the shelves of duty-free shops.
While this attempt to promote Brand India is a welcome move, the CBEC should consider grant of drawback to such India-made goods sold to departing travellers against payment in foreign currency. And, include removals to such warehouses under Rule 6(6) of the Cenvat Credit Rules, 2004, so that the manufacturers are not required to forego the Cenvat Credit on the inputs used in the manufacture of such goods.
The CBEC has also issued circulars to facilitate transhipment of imported goods directly from gateway ports to Container Freight Stations located inland and to resolve the difficulties in availing of import duty exemptions concerning the oil exploration sector. These clarifications will ensure more flexibility to importers and reduce transaction costs.
The Directorate General of Foreign Trade has clarified that the benefits of deemed exports under para 8.2(f) are available only if supplies are under International Competitive Bidding (ICB), except for mega power projects; for the latter, this needn't apply. The relevant circular (no 1, dated May 29), says para 8.3(c)(i) and 8.4 of the Foreign Trade Policy (FTP) clearly provide that if supplies are under ICB, then these are exempted from payment of terminal excise duty. And, if supplies are not under ICB, then these are eligible for refund.
The circular reiterates that deemed export benefits are not available for supplies to non-mega power projects and that para 8.2(f)(i) and para 8.2(f)(ii) of the FTP are in continuation and, hence, to be read in conjunction. It says that para 8.2(f)(ii) of the FTP lays down conditions in respect of supplies covered under para 8.2(f)(i). The circular is clearly worded, tracing the evolution of the relevant legal provisions and leaves no doubt regarding the correct position.
The Reserve Bank of India widened the interest subvention scheme to include six more tariff lines in the textile sector and 101 more in the engineering sector. The dispensation will help exporters' access to pre-shipment credit at lower interest rates. Meanwhile, the development commissioner of the SEEPZ Special Economic Zone says gold and jewellery units must achieve a certain minimum value addition, a condition that comes as a surprise, as the SEZ laws prescribe only positive net foreign exchange earnings.
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