EXPORTS FRAMEWORK POLICY,SCHEMES AND PROCEDURES

EXPORTS EXPORTS FRAMEWORK FRAMEWORK

POLICY,SCHEMES POLICY,SCHEMES ANDAND

PROCEDURESPROCEDURES

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.6DG&CEO

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 11DG&CEO

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(D&R) Act

FT(D&R) Act repealed Import and Export (Control) Act, 1947.

FT(D&R )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 objectiveBasic 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 banker’s 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 saved> 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.DG&CEO

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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 . 3%when exporter uses imported inputs under Advance authorisation or claim DEPB/DBK of over 1%.

EOUs not availing 10 B benefits also eligible.39DG&CEO

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 SCHEMECategory 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 7,500CrDG&CEO

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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@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

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