Ministry’s actions allay trade fears T N C RAJAGOPALAN
The Director General of Foreign Trade has also extended the validity of Handbook of Procedures 2015-20 till the end of March 2021
Considering the massive disruption of economic activities due to the spread of Covid-19, the commerce ministry has extended the life of the Foreign Trade Policy (FTP) 2015-20 till the end of the fiscal year 2020-21. The Director General of Foreign Trade (DGFT) has also extended the validity of Handbook of Procedures (HBP) 2015-20 till the end of March 2021.
Many provisions relating to the export promotion schemes have been amended to extend the validity of the import authorisations, the export obligation periods and the last dates for making applications, submitting installation certificates and so on.
Relevant provisions have been amended under the Export Oriented Units (EOU) scheme to extend the validity of letters of approvals or permissions (LOA/ LOP) granted and under the Special Economic Zones (SEZ) scheme. Even the provisions under the Income Tax law have been amended to extend the dates for commencement of production for availing of the exemptions available for SEZ units.
The Reserve Bank of India has extended the time limit for realisation of export proceeds from 9 to 15 months.
The Finance Ministry has relaxed the compliance requirements and extended the deadlines for filing GST (Goods and Services Tax) returns. Many other government departments have also given necessary relaxations to help the trade cope with the lockdown across the country.
These timely actions of the government help alleviate at least some of the anxieties of the trade.
The Federation of Indian Export Organisations (FIEO) has expressed satisfaction that many of its recommendations have been accepted by the government. However, some of its requests that have not yet been acted upon include the extension of interest equalisation scheme, amnesty scheme for old advance authorisations, EPCG (Export Promotion Capital Goods) authorisations, and EOU for regularisation of default by payment of only Customs duty without interest and penalty to lessen the burden on industry.
Extension i n pre- and post-shipment credit by a minimum of 180-270 days, exemption from interest and penalty on crystallisation of bills on due date, loss in forward cover to be converted in interest free loan to be paid after 90 -180 days, auto enhancement of credit limits by 10 per cent have also not been acted upon.
Other requests include immediate clearance of all exports benefits to exporters, including those for risky exporters (against a bond), relaxation in physical examination norms due to lesser availability of manpower, waiver of premium or pre-shipment credit guarantee and some other fiscal reliefs to the industry. Hopefully, these suggestions will come up for consideration.
Many exporters are surprised that the DGFT has not extended the validity of the duty credit scrips that expire during the lockdown.
Expiry of such unutilised duty credits will amount to financial loss for exporters. The DGFT had granted certain onetime condonation under EPCG scheme that exporters could not take advantage of by end March.
The last date for that dispensation needs to be extended. Similarly, some exporters had not claimed the duty credit scrips against services exports made in 2016-17. The last date for their claims with suitable late cut expired on March 31. They need suitable extension of last date. These and similar matters are left out, perhaps inadvertently. The DGFT should consider extension for such matters.
The Customs brokers have highlighted many difficulties in functioning, mainly the problems their employees face in attending office. Their representations deserve prompt attention.