The Director General of Foreign Trade (DGFT) has, once again, granted extension in the period for completion of export obligations against advance licenses. This time, the amnesty covers all licenses issued under the Exim Policy 1992-97. As usual, the license holder has to furnish a bank guarantee covering 100 per cent of the amount of duty saved on the unutilised material plus interest at 24 per cent per annum from the date of import to the date up to which extension is sought.
The application for extension has to be sought within 60 days from the date of Public Notice no. 48 dated 7th November 2001 and has to be accompanied by a bank guarantee valid for 12 months from the date of public notice or a certificate that the Customs have accepted such a bank guarantee. The extension can be sought on licenses where the export obligation has not been fulfilled within 30 months from the date of issue of the license. Maximum six months extension can be sought i.e. up to May 6, 2001.
The DGFT has also regularised cases where exports have been made outside the export obligation period but before the date of the public notice, subject to payment of a composition fee. Strangely, there is no mention about composition fee in respect of those seeking extension now and fulfillment of export obligation after the date of the public notice.
This extension is one more in a series of measures to avoid the unpleasant task of asking exporters to cough up the duty exemption that they have availed on imported goods. For the bureaucracy, issuing fresh licenses or the process of granting reliefs is always more rewarding than pinning down the defaulters. Since 1996, one way or the other, the DGFT has avoided harsh action against defaulters. In respect of Export Promotion Capital Goods (EPCG) scheme, actions against defaulters have been deferred even ten years after issue of licenses.
The latest relief follows a series of measures to combat the decline in export growth rate. The duty drawback rates were revised upwards a little earlier and the value caps on various Duty Entitlement Passbook (DEPB) entitlements were abolished. The DGFT and Revenue Department are doing everything within their powers to see that exporters are able to cope with the falling prices and cancellation of orders.
The latest procedural relaxation that the trade has every reason to welcome is the Central Board of Excise & Customs (CBEC) decision to abolish factory stuffing permission every six months and prescribe a one time factory stuffing permission. The trade awaits the modalities to be notified by the Customs authorities at the ports. These procedural relaxations follow complete overhauling of the Central Excise Rules that place complete trust in the assessees.
One area where CBEC can give substantial relief to 100 per cent export oriented units (EOU) is by abolishing the requirement of having to approach the jurisdictional Excise authorities for getting an Import Procurement Certificate, every time an import consignment has to be cleared duty free by the Customs. Similarly, every time the imported goods reach the EOU factory, the Excise officials have to examine the cargo and grant a re-warehousing certificate that will discharge the Customs transit bond.
These procedures increase the interface between the assessees and the Excise officials - something that the CBEC is trying to eliminate altogether for routine matters.
