Sandeep Ahuja & Co.

Established in the year 1986, we are a leading chartered accountancy firm based in Delhi & NCR rendering comprehensive professional services which include statutory audit, internal audit, direct tax, transfer pricing, GST, bank audit, propriety audit, cost accounting, internal financial controls and risk advisory.

Friday, June 12, 2015

India's Foreign Trade Policy 2015-2020

Export from India Schemes:

Merchandise Exports from India Scheme (MEIS)

·         Now all the earlier 5 export schemes have been merged into a single scheme called Merchandise Export from India Scheme (MEIS).
·         Notified goods exported to notified markets would be rewarded as a percentage of realised FOB value of exports.
·         The debits towards basic customs duty in the transferable reward duty credit scrips would also be allowed adjustment as duty drawback

Service Exports from India Scheme (SEIS)

·         SFIS has been replaced with SEIS .
·         It provides rewards to all service providers of notified services, who are providing services from India.
·         The rate of reward under SEIS would be based on net foreign exchange earned.
·         The present rates of reward are 3% and 5%

Chapter -3 Incentives

·         Chapter 3 incentives (MEIS & SEIS) to be available to units located in SEZs also.

Duty Credit Scrips
·         Scrips issued under MEIS and SEIS and goods imported against these scrips would be fully transferable.
·         Scrips can be used for the following :-
ü Payment of Custom Duties for import of inputs/ goods including capital goods (Except items listed in Appendix 3A)
ü Payment of excise duty on domestic
 procurement of inputs or goods,
 including capital goods as per DoR 
ü Payment of service tax on
procurement of services as per DoR
·        BCD paid in cash or through debits of duty credit scrips can be taken back as duty drawback as per DOP Rules, if inputs so imported are used for exports.

Status Holders
·        Status holders means the business leaders who have excelled in international trade and have successfully contributed to country's foreign trade. They will be given special treatment and privileges.
·        The criteria for export performance  for recognition of status holder have been changed from Rupees to US dollar earnings
Status category before FTP 2015-2020
Revised  Nomenclature
Export Performance
FOB / FOR (as converted)
Value (in US $ million) during current and previous two years
Export House
One star export house
Star Export House
Two star export house
Trading House
Three star export house
Star Trading House
Four star export house
Premier star trading house
Five  star export house
·        Manufacturers who are status holders will be permitted to self certify their goods originating from India with a view to qualify for preferential treatment under different agreements which are in operation as per their IEM/ IL/ LOI.

Boost to “Make in India”

Reduce export obligation for domestic procurement under EPCG Scheme
·        Export obligation under EPCG Scheme in case of capital goods has been reduced to 75% (6 times the duty saved amount).

Higher level of rewards under MEIS
·        It is proposed to give higher level of reward to products with high level domestic content  and value addition.

Trade facilitation and ease of doing business

Online filing of documents/ applications
·         It will now be possible to upload documents like annexures attached to ANF 3B, ANF  3C and ANF 3D online. However further documents earlier signed and  filed in physical form by CA/ CS /CWA ,etc can be uploaded online under their digital signature.
·         Application and documents under Chapter 3 & 4 of FTP are not required to be submitted to RA.
·         Any exporter may upload a copy of Bill of Entry under his digital signature.
·         Status holder falling under Three, Four , Five Star Export House may upload the scanned copy of documents.

Online Inter - ministerial consultations
·        There would be no need to submit hard copies of documents by the exporter for the following purposes:-
ü Export of SCOMET items
ü Norms fixation
ü Import authorisation
ü Export authorization

Simplification of procedures/processes,
digitisation and e-governance
·           Under EPCG scheme, obtaining and submitting a certificate from an independent Chartered Engineer, confirming the use of spares, tools, refractory and catalysts imported for final redemption of EPCG authorizations has been dispensed with.
·        The EPCG Authorization Holders shall be required to maintain records for a period of two years only.
·        Facility has been created to online upload the permanent records /documents in exporter / importer  profile.
·        Mobile number, e-mail address etc. has been added as mandatory fields, in IEC data base
·        It has been decided to have online
message exchange with CBDT for PAN
data and with MCA for CIN and DIN data.
·        Dedicated e-mail addresses have been provided to each Norms Committee, Import Committee and Pre-Shipment Inspection Agency for faster communication with Committees of DGFT.
·        Online filing of application for refund of TED is being introduced for which a new ANF has been created.

Forthcoming E- Governance initiatives
·        Message exchange for transmission of export reward scrips from DGFT to Customs.
·        Message exchange for transmission of Bills of Entry (import details) from Customs to DGFT.
·         Online issuance of Export Obligation Discharge Certificate .
·        Message exchange with MCA for CIN & DIN.
·         Message exchange with CBDT for PAN.
·        Facility to pay application fee using debit card / credit card.
·         Open API for submission of IEC application.
·         Mobile applications for FTP

Other new initiatives

New initiatives for EOUs, EHTPs and STPs
·           EOUs, EHTPs, STPs have been allowed to
share infrastructural facilities among themselves.
·           Inter unit transfer of goods and services have been allowed among EOUs, EHTPs, STPs, and
·           EOUs have been allowed facility to set up
warehouses near the port of export
·           STP units, EHTP units, software EOUs have
been allowed the facility to use all duty free
equipment/goods for training purposes.
·           100% EOU units have been allowed facility of
supply of spares/ components up to 2% of
the value of the manufactured articles to a
buyer in domestic market for the purpose of
after sale services.
·           One year can be extended for EOU units to achieve positive Net Foreign Exchange Earning (NEE).
·           LOP will have an initial validity of 2
years to enable the unit to construct the
plant and install the machinery. Further
extension can be granted by the Development
Commissioner up to one year. Extension
beyond 3 years of the validity of LOP, can be
granted, in case unit has completed 2/3rd of
activities, including the construction activities.
·           If transferred capital goods by EOU/EHTP/STPI units to other EOUs, EHTPs, STPs, SEZ units are rejected, then the same can be returned to supplying unit , without the payment of duty.
·           A simplified procedure will be provided to
fast track the de-bonding / exit of the STP/
EHTP units.
·           EOUs having physical export turnover of
Rs.10 crore and above, have been allowed
the facility of fast track clearances of import
and domestic procurement

Facilitating & Encouraging Export of dual use items (SCOMET).
·           Validity of SCOMET export authorisation has been extended to 24 months
·           Authorisation for repeat orders will be considered on automatic basis subject to certain conditions.
·           Verification of End User Certificate (EUC) is being simplified if SCOMET item is being exported under Defence Export Offset Policy.

Facilitating & Encouraging Export of Defence Exports
·           Export obligation period for Export obligation period for export items falling in the category of defence, military store, aerospace and nuclear energy shall be 24 months from the date of issue of authorization or co-terminus with contracted duration of the export order, whichever is later.
·           A list of military stores requiring NOC of department of defence has been notified by DGFT.

e-Commerce Exports
·           Goods falling in the category of handloom products, books / periodicals, leather footwear, toys and customized fashion garments, having FOB value up to Rs. 25000 per consignment  shall be eligible for benefits under FTP. Such goods can be exported in manual mode through Foreign Post Offices at New Delhi, Mumbai and Chennai.
·           Export of such goods under Courier Regulations shall be allowed manually on pilot basis through Airports at Delhi, Mumbai and Chennai.

Duty Exemption
·           Imports against Advance Authorization shall also be eligible for exemption from Transitional Product Specific Safeguard Duty
·           Import of capital goods under EPCG Authorisation Scheme shall not be eligible for exemption from payment of anti-dumping duty, safeguard duty and transitional product specific safeguard duty

Additional Ports allowed for Export and import
·           Calicut Airport, Kerala and Arakonam ICD, Tamil Nadu have been notified as registered ports for import and export
Duty Free Tariff Preference (DFTP) Scheme
·           India has already extended duty free tariff
preference to 33 Least Developed countries(LDCs) across the globe. This is being notified under FTP.

Quality complaints and Trade Disputes
·           New Chapter on Quantity complaints and trade disputes has been incorporated.
·           Committee on quantity complaints and trade disputes (CQCTD) is being constituted in 22 offices and would have members from EPCs/FIEOs/APEDA/EICs.

Towns of Export Excellence
·           Vishakhapatnam and Bhimavaram in Andhra Pradesh has been added as towns of export excellence.

Contributed by:
Ms. Karishma Sharma
CA Finalist/Article Assistant
Sandeep Ahuja & Co.

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