India releases supplement to Foreign Trade Policy
6th June, 2012
The Annual Supplement for the year 2012-13 to the Foreign Trade Policy has been released on 5th June, 2012 by the Indian Commerce Ministry. The policy while granting some relief to exporters in terms of additional benefits and extension of some of the presently available concessions, also tries to restrict the outflow of foreign exchange by allowing domestic procurement against some of the popular duty credit scrips.
A major relief to the industry pertains to extension of zero duty EPCG scheme for one year and it will be available upto 31st March 2013. The scope of this scheme has been enlarged to cover even units that are availing Technology Up-gradation Fund Scheme (TUFS) for another line of business.
A new post-export EPCG scheme has been introduced. Under this new scheme, exporters can import capital goods on payment of duty and subsequently receive duty credit scrips on completion of export obligation. As duties are paid at the time of import of capital goods, export obligation has been fixed at 85% of the normal level. This will obviate monitoring and reporting requirements and reduce transaction costs.
North Eastern Region has been given special focus in this year’s supplement. In case of imports by eight North-Eastern states, EO would be only 25% of the normal export obligation under EPCG Scheme. To promote export of green technology, EO under EPCG Scheme has been reduced to 75% of normal levels in respect of export of 16 specified green technology products.
Other major changes include introduction of limited transferability of the scrips in respect of Status Holder Incentive Scrips, permitting utilization of duty credit scrips granted under FPS, FMS, VKGUY, SHIS, MLFPS, SFIS and AIIS for payment of central excise duty on goods procured from the domestic market and permitting import at any of the EDI ports irrespective of the port in which the Advance Authorisation has been registered without the requirement for Transfer Release Advice.
A new “e-BRC” system is being introduced. Under this system, banks would electronically transfer information relating to foreign exchange realization to the DGFT’s server and exporters will not be required to make any request to the bank for issuance of BRC.