EXPORTS FRAMEWORK POLICY,SCHEMES AND PROCEDURES

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EXPORTS FRAMEWORK POLICY,SCHEMES ANDPROCEDURES

• 9th November 2010

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Taxes and Duties

• Central Basic customs duty, additional Customs
  duty, special additional duty, education
  surcharge, service tax ,CST.
• State VAT, Electricity duty, Octroi, Mandi Tax,
  Turnover tax, Purchase tax, Luxary Tax,
  Entertainment Tax, Entry Tax in lieu of Octroi.
• Export Duty.
• GST CGST,SGST,IGST.

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Service Tax Refund

• 18 services eligible for refund.
• Details available at www.cbec.gov.in
• Refund only for service tax paid on specified
  services
• Provided no CENVAT benefit has been availed

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Procedure

• Manufacturer exporter to excise having claim over
  factory
• Others to excise having jurisdiction over
  regd./head office
• Before that STC is alloted to applicant
• Claim to be filed within 1 year from export from
  LEO

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Procedure(Contd.)

• No claim less than Rs 500
• If claim is upto 0.25 of fob ,document or
  application to be self certified
• If claim is more than 0.25 of fob ,document or
  application to be CA certified

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Zero Rebating of Exports

• No tax or duty on exports.( Export tariff
  aberration)
• No Excise duty or VAT on final product.
• Rebating of service tax on output services
• Other Central taxes refund through duty
  refund/exemption schemes.
• State Tax Except VAT ,rest are not refunded.

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IEC

• Permanent Code issued by DGFT
• Application Form
• Fee of Rs 250
• Copy of PAN
• Copy of bankers Certificate
• Declarations
• Exempted Categories

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BIN

• Software generated at Customs
• Transmission of IEC
• 15 digit
• PAN FT 001 and so on

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RCMC

• Issued by Councils/Boards/Authorities
• Form
• IEC
• Membership Fee

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Shipping Bill

• Shipping bill for export of goods under claim for
  duty drawback/DEPB etc.
• Shipping Bill for export of dutiable goods.
• Shipping Bill for export of duty free goods.(Free
  or White )
• Shipping bill for export of duty free goods
  ex-bond i.e. from bonded warehouse

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Bank Certificate of Exports Realisation

• Exports documents to be presented to bank within
  21 days
• Advance payment and status holders exempted
• After negotiation Bank Certificate of exports
  and subsequent to realisation banks issue BRC
• Required for claiming various benefits

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Examination by Customs

• Invoice
• Packing list
• ARE 1
• Rule 18
• Rule 19

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ARE 1

• Excise document for export clearance prepared
  in quintuplicate . Bears running serial number
  beginning from the first day of the financial
  year.
• Original White
• Duplicate Buff
• Triplicate Pink
• Quadruplicate Green
• Quintuplicate Blue

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MATE RECEIPT

• An acknowledgement of cargo receipt signed by a
  mate of the vessel.
• The possessor of the mate's receipt is entitled
  to the bill of lading, in exchange for that
  receipt.

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BILL OF LADING

• A  document issued by a carrier  to a shipper,
  acknowledging that specified goods  have been
  received on board for delivery to the consignee
• Evidence of a valid chartering contract and
  may incorporate the full terms of the contract
  between the consignor and carrier.

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BOL

• Receipt signed by the carrier confirming goods
  matching the contract description have been
  received in good condition
• A document of transfer, being freely transferable
  but not negotiable instrument
• It governs all the legal aspects of physical
  carriage and like a cheque  or other negotiable
  instrument may be endorsed

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Straight /Order BOL

• A straight bill of lading is a non-negotiable
  document, made out to a specifically named
  consignee
• An Order bill of lading is a document that is
  made out to the order of the foreign importer /
  its bank/ export firm/ its bank, or another
  designated party.

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FT(DR) Act

• FT(DR) Act repealed Import and Export (Control)
  Act, 1947.
• FT(DR )Act, 1992 provide for development and
  regulation of foreign trade by facilitating
  imports and augmenting exports .

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FOREIGN TRADE POLICY

• Section 5 of Foreign Trade (Development and
  Regulation) Act, 1992 empowers the Central
  Government to notify the Exim (FT) Policy.
• Para 2.4 of Foreign Trade Policy empowers
  DGFT to notify procedures

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FOREIGN TRADE POLICY 2009-14

• Basic objective
• To double our global share of merchandise and
  services exports by 2014.
• Provide stability to Policy with continuation of
  Schemes.
• Diversify our product and market base.
• Reduce transaction time and cost

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Imports/Exports

• All Imports/Exports are free except for the items
  shown as Prohibited/Restricted/State trading
  enterprises.
• Import/Export permitted from/to any destination
  .Import/export of arms and related material
  from/to Iraq and North Korea prohibited

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Imports/Exports (Contd)

• Prohibited goods- Not allowed except in
  exceptional cases with approval of Central
  Government.
• Restricted goods May be allowed under a licence
  or through a public notice.
• STE goods- May be imported/exported by STE(s)
  or with a licence from DGFT.

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Pre-requisite of Import/Export

• Importer-Exporter Code (IEC)- Mandatory except
  for exempted categories in paragraph 2.8 of
  Handbook of Procedure
• Documentation- Application form with fee .
• Copy of PAN.
  
• Copy of bankers
  Certificate
• Declaration regarding NRI interest

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EXPORT PROMOTION SCHEMES

• Export Promotion Capital Goods Scheme.
• Duty Exemption Scheme.
• VKGUY
• Focus Product, Focus Market and Market linked
  Focus Product Scheme
• EOU/SEZ Scheme
• Status holder Scheme.

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Export Promotion Capital Goods Scheme

• Import of capital goods at a concessional basic
  customs duty of 0 for selected sectors and 3
  allowed(for all sector) for export purposes. .
• Spare ,Jigs ,fixture ,dies and moulds also
  allowed.
• Second hand CG without any age restriction
  permitted under the Scheme.

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Conditions of Exports

• Export to be effected equivalent to 8 times (5
  times for agro, cottage and tiny sector and 6
  times for SSI units)of the duty saved on capital
  goods .
• Exports to be completed in 8 years/12 years time.
• For Zero duty,6 times in six years.
• 12 years for duty savedgt Rs 100 Cr , and units in
  agro, cottage and tiny sector.

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Conditions of Exports (Contd)

• Export of goods capable of being manufactured by
  use of capital goods.
• EO could be discharged by export of goods
  produced in different manufacturing unit of the
  company.
• Facility to meet 50 of EO by exports of
  additional items from the same company/group
  companies permitted.

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Duty Exemption/Remission Scheme

• Advance Authorisation.
• Annual Advance Authorisation
• Duty Free Import Authorisation .
• Duty Entitlement Pass Book Scheme.
• Duty Drawback Scheme

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Advance Authorisation

• Duty Free import of inputs allowed for exports.
• Minimum 15 value addition to be achieved.
• Exports/Imports to be completed in 24 months.
• Bond / BG / LUT to be given to the Custom
  Authorities.

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Advance Authorisation

• Advance License indicates description of export
  items, quantity of export item, FOB value of
  exports, description of import items, quantity of
  import items and CIF value of imports.
• Import of inputs exempted from Basic Customs
  duty, Additional Customs duty and
  Safeguard/Anti-dumping duty.

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Annual Advance Authorisation

• Available only to status holders and exporters
  with 2 years exports.
• Entitlement equivalent to 300 of the FOB value
  or Rs 1 crore ,whichever more in preceding year.
• Authorisation valid for 24 months imp/ exports.

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Annual Advance Authorisation (Contd..)

• Licence only mentions the export product group,
  CIF value and FOB value.
• Licence holder can export any product falling
  under the product group including items for
  which norms do not exist.
• Only one licence for one product group or port of
  registration.

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Duty Free Import Authorisation

• New Scheme effective from 1st May,2006
• Exporter allowed to import inputs free of Basic
  Customs and or Additional /SAD duty.
• DFIA indicates names and quantity of the
  raw-material to be allowed duty free.
• Minimum value addition of 20 required.

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Duty Free Import Authorisation (Contd.)

• DFIA and/or material imported under it
  transferable after completing EO.
• Scheme covers only products for which Standard
  Input Output Norms exist.
• Additional Customs duty is refunded through
  CENVAT or drawback in case of transferabilty.
• CENVAT permitted under the scheme.

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Duty Entitlement Pass Book Scheme

• Substitution Drawback Scheme under ASCM
• Aims to neutralize incidence of customs duty on
  import content of export product,
• Exporter entitled for credit at a pre-specified
  rate of FOB value of exports.
• Rates dependent on SION, value addition and
  Basic Customs duty.

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Duty Entitlement Pass Book Scheme (Contd)

• Credit can be utilised for import of items
  otherwise freely importable except capital goods.
  
• For edible oil debit could be only upto 50 from
  DEPB.
• Basic Customs duty, Additional Customs duty
  debitble from DEPB .
• Validity 24 months and upto the last day of the
  month.

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Drawback Scheme

• All-Industry for a product by all companies
  /firms
• Brand Rate Exclusive to a company/firm for a
  product
• AIDBK not available
• Refunds less than 4/5th of duties

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Drawback Scheme(contd)

• New Drawback Schedule notified from 17th Sept
  2010
• Most drawback rates are specific as against
  ad-valorem
• Drawback Schedule covers now about 1400 products.

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VKGUY

• Objective to promote agriculture, forest produce
  and their value added forms, Forest produce and
  Gram Udyog Products
• Benefit of 5 transferrable duty free credit
  entitlement for products given in App 37 A .
  3when exporter uses imported inputs under
  Advance authorisation or claim DEPB/DBK of over
  1.
• EOUs not availing 10 B benefits also eligible.

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Focus Market Scheme

• To offset high freight cost and other
  externalities to select international market.
• Benefit of 3 transferrable duty free credit
  entitlement for countries given in App 37 C.
• EOUs/STPs/EHTPs not availing 10 B benefits also
  eligible.

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Focus Product Scheme

• To incentivise exports with high employment
  intensity in rural and semi urban areas
• Benefit of 2 transferrable duty free credit
  entitlement for products given in App 37 D .
• EOUs/STPs/EHTPs not availing 10 B benefits also
  eligible.
• Special Focus Products under table 2 and 5 to be
  given 5

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Market Linked Focus Product Scheme

• Benefit is given on a product country matrix
• 2 transferable duty free credit entitlement for
  listed products to specified countries
• Exclusivity Only one of the benefit of
  FMS,FPS,MLFPS or VKGUY can be claimed.

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Served From India Scheme

• Accelerate growth of services exports and create
  Served from India brand
• All service providers with foreign exchange
  earning of Rs 10 lakh and more eligible
  .Individual with Rs 5 lakh forex earnings also
  eligible.
• Entitled for 10 duty free credit of current
  year forex earnings.

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Served From India Scheme(Contd.)

• Duty free Credit to be used for imports of
  capital goods office equipments, spares,
  professional equipments, office furniture
  consumables
• Domestic procurement permitted
• Not transferrable (except within Group Company
  and Managed Hotels)

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Export Oriented Units

• Introduced in early 1981 (Prakash Tandon
  Committee) to offer duty and control free regime
  of export production without location binding.
• Units for manufacturing and services (no trading
  permitted)
• Only projects having minimum investment of Rs 1
  Cr in plant machinery except specified sectors.

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Export Oriented Units (Contd)

• Facilities
• Import/ Export all goods except prohibited
• Exemption from IT under section 10B
• Exemption from industrial licensing for SSI
  items
• 100 FDI permitted through Automatic route as
  applicable to SEZ.

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Export Oriented Units (Contd)

• 100 of export earnings in EEFC
• Export remittance within 12 months.
• OBU to extend the credit on same terms as
  extended to units in SEZ
• DTA sale up to 50 of FOB value of exports

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Export Oriented Units (Contd)

• NFEP to be positive over 5 years.
• Supplies to these units deemed exports.
• Re-imbursement of CST on goods manufactured.
• Remission of Service Tax
• Exemption from excise on domestic procurement

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Special Economic Zones

• Scheme announced in March, 2000.
• Foreign territory for taxes and duties
• Goods from DTA to SEZ exports, reverse process
  imports.
• Developers of SEZs eligible for tax/duty
  exemptions

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Special Economic Zones(Contd)

• Facilities for developer
• IT exemption as per 80 IA of IT
• Import/procurement of CG and inputs without
  customs/excise duty
• Exemption from CST
• Exemption from Service Tax

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Special Economic Zones(Contd)

• Facilities for units
• Import/ Export all goods except prohibited
• Exemption from Income Tax
• Exemption from industrial licensing for SSI
  items
• 100 FDI permitted through Automatic route .

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Special Economic Zones (Contd)

• NFEP to be positive over 5 years
• 100 of export earnings in EEFC
• Export remittance without any time limit.
• OBU to extend the credit on international
  benchmarks.
• DTA sale without any limit subject to NFE
  positive on applicable duties.

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Special Economic Zones(Contd)

• No interference from the Custom Authorities
  inside the zone
• Supplies to these units physical exports.
• Exemption of CST on goods manufactured.
• Exemption of Service Tax

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STATUS SCHEME
Category Total exports during current plus 1/2/3 years
EXPORT HOUSE Rs 20 Cr
STAR EXPORT HOUSE Rs 100Cr
TRADING HOUSE Rs 500 Cr
STAR TRADING HOUSE Rs 2500 Cr
PREMIER TRADING HOUSE Rs 7,500Cr
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Facilities To Status Holders

• Automatic issuance of Authorisation
• 100 in EEFC
• Direct negotiation of documents
• Fixation of Norms in 60 days
• Exemption from BG.
• Accelerated Customs clearance under ACP
• Status Holder Incentive Scrip

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Status Holder Incentive Scrip

• Leather(excl finished),Textiles Jute,
  Handicrafts Engineering (except metals in primary
  or intermediate forms, automobiles,two wheelers,
  nuclear reactors ,ship boats and floating
  structures),Plastic and Basic Chemicals(excl
  Pharma)
• Incentive_at_1 for exports in 2009-10 , 2010-11and
  2011-12
• Actual User for imports of capital goods
• Beneficiary of TUF not eligible

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Status Holder Incentive ScripNew Products

• 1 Chemical Allied Products (other than Bulk
  minerals, Granite/Stones,Processed minerals,
  Cement, Clinkers
• and asbestos)
• (i) Rubber products, 4001 to 4010,4014 to 4017
• (ii) Paints, Varnishes Allied Products 3208,
  3209,3210
• (iii) Glass and glassware Chapter 70
• (iv) Plywood and allied products Chapter 44
• (v) Ceramics / refractories Chapter 69
• (vi) Paper, Paper Boards Paper products Chapter
  48
• (vii) Books, Publications Printings Chapter 49
• (viii) Animal By-products (Codes35030030, ,
  05069099, 05079010,05079020, 05079050, 23011010,
• 23011090, 96062910, and 96063010)
• (ix) Ossein GelatineCodes05061039 and 35030020
• (x) Graphite Products (Codes 3801,85451100 and
  85451900)
• Explosives (Codes 3601, 3602 and 3603)
• (xi) Misc. Products (Codes 3201,32029010,
  32030010, 3604, 3605, 38021000)

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Status Holder Incentive ScripNew Products

• Electronics Products
• Sports Goods and Toys
• Chapter 95and Codes420321,650610
• Engineering products for the three groups
  indicated below Chapter 72
• (i) Iron and Steel
• (ii) Pipes and tubes
• (iii) Ferro Alloys

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• THANK YOU ALL