HIGHLIGHTS OF ANNUAL SUPPLEMENT 2013-14 TO FOREIGN TRADE POLICY 2009-14.

Dated : 18th April, 2013

 

To : All Members of the Council.

From : Shiv Kumar Gupta, Executive Director, CEPC

 

Sub.: HIGHLIGHTS OF ANNUAL SUPPLEMENT 2013-14 TO FOREIGN TRADE POLICY 2009-14.

 

          Today Shri Anand Sharma, Hon’ble Minister of Commerce, Industry & Textiles  announced Annual Supplement 2013-14 to Foreign Trade Policy  2009-2014.  Some of the points as given in highlights are as under,  for information of the Members :

 

2.      Zero Duty Export Promotion Capital Goods (EPCG) Scheme

 

2.1    Foreign Trade Policy has two variants under this scheme, namely, Zero Duty EPCG for few sectors and 3% Duty EPCG for all sectors. During the last announcement on 5th June, 2012, a new Post Export EPCG Scheme was also announced which was notified on 18 February, 2013 by the CBEC. Based on the request of all stakeholders, Government has decided to harmonize Zero Duty EPCG and 3% EPCG Scheme into one scheme which will be a Zero Duty EPCG Scheme covering all sectors. 

 

                                2.2    Following are the salient features of the Zero Duty EPCG Scheme:-

                                 

(i)      Authorization holders will have export obligation of 6 times the duty saved amount. The export obligation has to be completed in a period of 6 years. 

 

(ii)      The period for import under the Scheme would be 18 months. 

                 

(iii)     Export obligation discharge by export of alternate products as well as accounting of exports of group companies will not be allowed.

 

(iv)    The exporters who have availed benefits under Technology Upgradation Fund Scheme (TUFS) administered by Ministry of Textiles, can also avail the benefit of Zero duty EPCG Scheme. 

                (v) The import of motor cars, SUVs, all purpose vehicles for hotels, travel agents, or tour transport operators and companies owning/operating golf resorts will not be allowed under the new Zero Duty EPCG Scheme. 

 

                                2.3    Reduced EO for Domestic Sourcing of Capital Goods - The quantum of specific Export Obligation (EO) in the case of domestic sourcing of capital goods under EPCG authorizations has been reduced by 10%. This would promote domestic manufacturing of capital goods.

 

                                2.4    Reduced EO for units in the State of Jammu & Kashmir - In order to encourage manufacturing activity in the State of Jammu & Kashmir, it has been decided to reduce the specific export obligation (EO) to 25% of the normal export obligation. Earlier, this benefit was announced on 5th June, 2012 in respect of units located in North Eastern Region and Sikkim. This provision is now being extended to J&K.

 

3.      Widening of Interest Subvention Scheme

 

3.1    At present, 2% interest subvention scheme is available to certain specific sectors like Handicrafts, Handlooms, Carpets, Readymade Garments, Processed Agricultural Products, Sports Goods and Toys. The scheme had been further widened to include 134 sub-sectors of engineering sector. Government had also announced that the benefit of this scheme of 2% interest subvention could be available upto 31.03.2014. 

 

5.      Market and Product Diversification

 

5.1    Norway has been added under Focus Market Scheme and Venezuela  has been added under Special Focus Market Scheme. The total number of countries under Focus Market Scheme and Special Focus  Market Scheme becomes 125 and 50 respectively.

 

5.2    Approximately, 126 new products have been added under Focus Product Scheme. These products include items from engineering, electronics, chemicals, pharmaceuticals and textiles sector.

 

5.3    About 47 new products have been added under Market Linked Focus Product Scheme (MLFPS). These products are from engineering, auto components and textiles sector. 2 new countries i.e., Brunei and Yemen have been added as new markets under MLFPS.

 

5.4    MLFPS is being extended from 01.04.2013 to 31.03.2014 for exports to USA and EU in respect of items falling in Chapter 61 and Chapter 62 of ITC(HS).

 

5.5    Exports of High Tech products would be incentived and it would be separately notified by 30th June, 2013.

 

5.6    The towns of Morbi (Gujarat) and Gurgaon (Haryana) have been added to the existing list of towns of export excellence for ceramic tiles and apparel exports respectively. These towns shall be eligible to get benefit under ASIDE Scheme.

 

6.      Incremental Exports Incentivisation Scheme

 

6.1  Government has announced Incremental Export Incentivisation Scheme on 26.12.12 for the exports made during January 2013 to March 2013. This scheme is available for exports made to USA, EU and Asia. It has been agreed to extend this scheme for the year 2013-14. The calculation of the benefit shall be on annual basis under the extended scheme.

 

6.2    The Government has also agreed to include additional countries under Incremental Exports Incentivisation Scheme. 53 countries of Latin America and Africa have been added with the objective to increase India‟s share in these markets. The present exports to each of these markets is less than US $ 100 million.

 

10.    Status Holder Incentive Scheme (SHIS)

 

10.1 Status Holder Incentive Scheme (SHIS) was extended for the year 2012-13. The scheme will not be available for the year 2013-14. Regional Authority shall allow limited transferability of SHIS scrip within group company of the status holder provided the group company is a manufacturer. 

 

16.    Electronic Data Interchange Initiatives

 

16.1            e-BRC system allows Transmission of realization of export proceeds details from banks to DGFT in electronically secured format. The system has been made mandatory with effect from 17th August, 2012. Up to 16th April, 2013, 31.2 lakh e-BRC have been uploaded on the website of DGFT by 81 banks. e-BRC data is also of use to different ministries/departments of Central Government and State Governments who have expressed interest in obtaining this data from DGFT. Government of Maharashtra and Delhi have started the process, as first movers, to use e-BRC data for processing VAT refund claims of exporters. e-BRC will improve the productivity of DGFT, Banks, Central and StateGovernment departments dealing with exporter/ importers and will lead to substantial reduction of transaction cost and time.

 

16.2  Reconciliation of export and bank documents at the time of closure of an Advance or EPCG Authorisation involved manual submission of many documents. Transmission of two key documents (Shipping bill from Customs and e-BRC from Banks) relating to Advance Authorization and EPCG Authorizations in secured electronic format to DGFT has been established. Accordingly, DGFT has introduced the system of online Export Obligation Discharge certificate (EODC). Exporters can file EODC applications online. DGFT will also transmit all EODCs to DG Systems through a secured message exchange. This will obviate the need to have re-verification at the Custom‟s end. Reconciliation of export / import closure of an authorization was document heavy process. With online EODC, exporter can complete the formalities at DGFT online and may get quick clearances at the Customs on account of e-transmission of EODC from DGFT to Customs. 

 

17.    Ease of Documentation and procedural simplification

 

17.1 Submission of physical copies of IEC and Registration-cum-Membership Certificate (RCMC) with individual application has been dispensed with.

 

17.4 Existing procedures contained in para 2.20A of Handbook of Procedures related to execution of bank guarantee / legal undertaking stands deleted.

 

2.20 A – At the time of filing application for scrip(s) under DEPB Scheme/ freely transferable incentive Scheme under Chapter 3 of FTP, without Bank Realization Certificate (BRC), the applicant shall execute BG/LUT (as per Customs Circular No. 58/ 2004) with the RA as per Appendix 25C or Appendix 25D respectively.”

 

 

Regards,

 

 

Shiv Kumar Gupta.