Virtual Webinar on Overview of Foreign Trade Policy ...

SPEAKER :

CA. Hans Raj Chugh

F.C.A, F.C.S, L.L.B, Insolvency Professional

Mobile No. 9811207924

Email:- [email protected]

17th September

2020

Organised & Hosted by : Hyderabad Branch of SIRC of ICAI

Virtual Webinar on

Overview of Foreign Trade Policy & Professional

Opportunities

Thursday

6PM- 8PM

Foreign Trade Statistics

India’s Foreign Trade: April – March 2019-20

India’s Foreign Trade: April – August 2020-21

*Note: i) The latest data for services sector released by RBI is for July 2020. The data for August 2020 is an estimation, which

will be revised based on RBI’s subsequent release ii) the figures in bracket are growth rates vis-à-vis corresponding period of

last year.

EXPORTS (including re-exports)

Exports inAugust2020 were USD22.70 billion, as compared to USD25.99billion in August 2019, exhibiting a

negative growth of (-)12.66per cent. In Rupee terms, exports were Rs. 1,69,513.81crore in August2020, as

compared to Rs. 1,84,921.23crore in August2019, registering a negative growth of (-)8.33per cent.

Major commodities which have recorded positive growth during August 2020 vis-à-vis August 2019 are Other

cereals (316.04%), Rice (59.14%), Iron ore (46.03%), Oil meals (28.89%), Oil seeds (24.96%), Cereal

preparations & miscellaneous processed items (24.05%), Drugs & pharmaceuticals (17.27%), Carpet (15.53%),

Fruits & vegetables (15.04%), Meat, dairy & poultry products (10.73%), Tobacco (10.59%), Jute mfg. including

floor covering (9.18%), Plastic & Linoleum (0.59%) and Coffee (0.09%).

Major commodities which have recorded negative growth during August 2020 vis-à-vis August 2019 are

Cashew (-47.61%), Gems & jewellery (-43.28%), Petroleum products (-39.91%), Man-made yarn/fabs./made-

ups etc. (-24.23%), Marine products (-23.04%), Leather & leather products (-16.82%), Tea (-16.74%), Mica,

Coal & other ores, minerals including processed minerals (-16.59%), RMG of all textiles (-14%), Electronic

goods (-13.84%), Spices (-7.96%), Engineering goods (-7.69%), Handicrafts excl. hand made carpet (-5.24%),

Organic & inorganic chemicals (-4.71%), Ceramic products & glassware (-4.61%) and Cotton yarn/fabs./made-

ups, handloom products etc. (-0.42%).

Cumulative value of exports for the period April-August 2020-21 was USD97.66billion (Rs.7,35,835.87crore)

as against USD133.14billion (Rs.9,28,243.85crore) during the period April-August 2019-20, registering a

negative growth of (-)26.65per cent in Dollar terms (negative growth of (-)20.73per cent in Rupee terms).

Non-petroleum and Non-Gems and Jewellery exports in August 2020 were USD18.95billion, as compared to

USD19.57billion in August2019, registering a negative growth of (-) 3.17per cent. Non-petroleum and Non-

Gems and Jewellery exports in April-August 2020-21 were USD83.24billion, as compared to USD99.65billion

for the corresponding period in 2019-20, which is a decrease of (-)16.47 per cent.

Major commodity groups of import showing negative growth in August 2020 over

the corresponding month of last year are:

IMPORTS

Merchandise Trade EXPORTS & IMPORTS : (US $ Billion)

(PROVISIONAL)

AUGUST APRIL-AUGUST

EXPORTS (including re-exports)

2019-20 25.99 133.14

2020-21 22.70 97.66

%Growth 2020-21/ 2019-20 -12.66 -26.65

IMPORTS

2019-20 39.85 210.39

2020-21 29.47 118.38

%Growth 2020-21/ 2019-20 -26.04 -43.73

TRADE BALANCE

2019-20 -13.86 -77.25

2020-21 -6.77 -20.72

EXPORTS &IMPORTS: (Rs. Crore)

(PROVISIONAL)

AUGUST APRIL-AUGUST

EXPORTS(including re-exports)

2019-20 1,84,921.23 9,28,243.85

2020-21 1,69,513.81 7,35,835.87

%Growth 2020-21/ 2019-20 -8.33 -20.73

IMPORTS

2019-20 2,83,530.41 1,466,659.90

2020-21 2,20,083.69 8,91,978.43

%Growth 2020-21/ 2019-20 -22.38 -39.18

TRADE BALANCE

2019-20 -98,609.17 -5,38,416.05

2020-21 -50,569.88 -1,56,142.56

Service Trade

EXPORTS & IMPORTS (SERVICES) : (US $ Billion)

(PROVISIONAL) July 2020 April-July 2020-21

EXPORTS (Receipts) 17.03 67.24

IMPORTS (Payments) 10.05 39.25

TRADE BALANCE 6.98 28.00

EXPORTS & IMPORTS (SERVICES): (Rs. Crore)

(PROVISIONAL) July 2020 April-July 2020-21

EXPORTS (Receipts) 1,27,721.26 5,08,679.39

IMPORTS (Payments) 75,345.87 2,96,868.14

TRADE BALANCE 52,375.39 2,11,811.25

Source: RBI Press Release dated 15th September 2020

COVERAGE

Export From Indian Schemes (MEIS,SEIS)

Status holder (Export house)

Duty exemption schemes (Advance Authorization, DFIA)

Duty remission schemes (Duty Drawback)

Export Promotion of Capital Goods (EPCG)

Refund of GST on exports of Goods or Services

Refund of GST in case of Deemed exports

Others-Merchant Exports, Benefits of AEO

CA. Hans Raj Chugh

CA. Hans Raj Chugh 10

Foreign Trade Policy 2015-20

Foreign Trade Policy- Contents

• Chapter 1 :- Legal Framework & Trade Facilitation

• Chapter 2 :- General Provisions Regarding Imports and Exports

• Chapter 3 :- Export From Indian Schemes

• Chapter 4 :- Duty Exemption/Remission Schemes

• Chapter 5 :- Export promotion capital goods (EPCG ) Scheme

• Chapter 6 :-Exports Oriented Units (EOUS), Electronics Hardware

Technology Parks (EHTPS), Software Technology Parks (STPS) and Bio-

Technology parks.

• Chapter 7:- Deemed Exports

• Chapter 7 (A):- Transport & Marketing Assistance (TMA)

• Chapter 8 :- Quality Complaints And Disputes

• Chapter 9 :- Definitions

11 CA. Hans Raj Chugh


General Provisions

Presently, Foreign Trade Policy 2015-20 is effective from 1st April, 2015.

Exports and Imports are regulated by Foreign Trade Policy notified by Central

government in exercise of powers conferred by section 5 of Foreign Trade

(Development and Regulation) Act 1992.

Exports & Imports shall be FREE except when regulated by way of :-

Prohibition:-any goods or services, the export or import of which prohibited,

are not allowed to import or export.

Restriction:- any goods or services, the export or import of which restricted,

may be exported or imported only under an authorization/permission

Or exclusive trading through stat trading enterprises (STEs):-Any goods,

import or export of which is governed through exclusive or special privilege

granted to STEs, may be imported exported by the concerned STEs.


No import export without IEC

Importer-Exporter Code (IEC) Number

An IEC is a 10 digit number which is mandatory for undertaking export/ import.

Applicants can apply for e-IEC on the DGFT website (http://dgft.gov.in/).

Post GST PAN shall Be the IEC number but have to applied & obtained

separately from DGFT.

Only one IEC can be obtained against a single PAN.

Registration cum membership certificate (RCMC)

For availing authorization to import/ export or any other benefit or

concession under FTP 2015-20, as also to avail the services/ guidance, exporters

are required to obtain RCMC granted by the concerned Export Promotion

Councils/ FIEO/Commodity Boards/ Authorities.

http://dgft.gov.in/

http://dgft.gov.in/

http://dgft.gov.in/

http://dgft.gov.in/

http://dgft.gov.in/

http://dgft.gov.in/

http://dgft.gov.in/


Mandatory documents for export/ import of goods from/into India.

For exports of goods from India:-

1. Bill Of Lading/Airway Bill/Lorry Receipt/Railway Receipt/Postal Receipt

2. Commercial invoice and packing list*.

3. Shipping bill /bill of exports/postal bill of export.

For Imports of goods into India:-

1. Bill Of Lading/Airway Bill/Lorry Receipt/Railway Receipt/Postal Receipt in form CN22 orCn23 as case may be.

2. Commercial invoice and packing list*.

3. Bill of Entry.

*Separate Commercial invoice and packing list would also be accepted

Sl.

no

Old Schemes

under FTP 2009-14

New Schemes

Under FTP 2015-20

1. Vishesh Krishi and Gram Udyog Yojana

(VKGUY)

Agri. Infrastructure Incentive

Scrip(AIIS)

Merchandise Export From

India Scheme (MEIS)

2. Focus Market Scheme (FMS)

3. Focus product Scheme (FPS)

4. Market Linked Focus Products Scrip

(MLFPS)

5. Served From India Scheme(SFIS) Service Exports from India

Scheme (SEIS)

15

CA. Hans Raj Chugh

Chapter 3 Schemes-MEIS or SEIS

Merchandise Exports from India Scheme (MEIS)

Objective

-to offset infrastructural inefficiencies and associated costs involved in export of

goods/products, which are produced/manufactured in India, especially those having

high export intensity, employment potential and thereby enhancing India’s export

competitiveness.

Entitlement under MEIS

Exports of notified goods/products with ITC[HS] code, to notified markets as listed,

shall be rewarded under MEIS ( @ 2 % or 3%,4%, 5% or 7% as applicable). (Appendix

3B- listed goods market and rates).

Basis of Calculation of Rewards

The basis of calculation of reward would be on realized FOB value of exports in free

foreign exchange, or on FOB value of exports as given in the Shipping Bills in free

foreign exchange, whichever is less, unless otherwise specified.




Incentive or rewards given under this scheme may vary from product to product and from

Country to Country. The Country/Market for which incentive are allowed are divided into

three category.

Category A Category B Category C

Traditional Markets (34)

•European Union

•USA

•Canada

Emerging & Focus Markets(140)

•Africa

•Latin America & Mexico

•CIS Countries

•Turkey ,western Asian countries

•ASEAN countries

•Japan, South Korea,China, Taiwan

Other Markets (65)


Export of goods through courier or foreign post offices using e-Commerce

Exports of goods through courier or foreign post office using e commerce, as

notified in Appendix 3C,

-of FOB value up to Rs.5,00,000 per consignment shall be entitled for rewards

under MEIS.

-of FOB value more than Rs 5,00,000 per consignment then MEIS reward

would be limited to FOB value of Rs.5,00,000 only.

(Such goods can be exported in manual mode through Foreign Post Offices at

New Delhi, Mumbai and Chennai. )


Sl.

No.

Chapters Products under the following chapters are not eligible for incentive

under MEIS

1 Chapter-01 Live animals

2 Chapter-02 Meat and edible meat offal

3 Chapter-10 Cereals

4 Chapter-24 Tobacco and manufactured tobacco substitutes

5 Chapter-25 Salt; sulphur; earths and stone; plastering materials, lime and cement

6 Chapter-26 Ores, slag and ash

7 Chapter-27 Mineral fuels, mineral oils and products of their distillation; bituminous

substances; mineral waxes

8 Chapter-31 Fertilizers

9 Chapter-34 Soap, organic surface-active agents, washing preparations, lubricating

preparations, artificial waxes, prepared waxes, polishing or scouring

preparations, candles and similar articles, modelling pastes, “dental

waxes” and dental preparations with a basis of plaster

10 Chapter-43 Furskins and artificial fur; manufactures thereof

11 Chapter-47 Pulp of wood or of other fibrous cellulosic material; recovered (waste

and scrap) paper or paperboard

12 Chapter-77 (reserved for possible future use)



Ineligible categories under MEIS

i. Supplies made from DTA units to SEZ units.

ii. Export of imported goods covered under paragraph 2.46 of FTP;

iii. Exports through trans-shipment, meaning thereby exports that are

originating in third country but trans-shipped through India;

iv. Deemed Exports;

v. SEZ/EOU/EHTP/BPT/FTWZ products exported through DTA units;

vi. Export products which are subject to minimum export price or export

duty

vii. Export made by units in FTWZ



Service Exports from India Scheme (SEIS)

Objective

Objective of Service Exports from India Scheme (SEIS) is to encourage export of

notified Services from India.

Eligibility :

• Service Providers of notified services, located in India, shall be rewarded under SEIS.

• Only Services rendered in the manner as per Para 9.51(i)-cross border trade and Para

9.51(ii) –consumption abroad shall be eligible. (notified services and rates of rewards are

listed in Appendix 3D.)

• Such service provider should have minimum net free foreign exchange earnings of

US$15,000 in the year of rendering services to be eligible for Duty Credit Scrip. For

Individual Service Providers and sole proprietorship, such minimum net free foreign

exchange earnings criteria would be US$10,000 in the year of rendering services.



"Service Provider" means a person providing:

CA. Hans Raj Chugh

Category SEIS

Availability

Mode-1

(Cross border trade)

Supply of a ‘service’ from India to any

other country;

Eligible

Mode -2

(Consumption abroad)

Supply of a ‘service’ from India to

service consumer(s) of any other

country;

Eligible

Mode-3

(Commercial Presence)

Supply of a ‘service’ from India through

commercial presence in any other

country.

Not eligible

Mode 4

(Presence of natural

persons)

Supply of a ‘service’ from India through

the presence of natural persons in any

other country

Not eligible

22


Eligibility :

Payment in Indian rupees for service charges earned on specified services, shall be

treated as receipt in deemed foreign exchange as per guidelines of RBI. (Appendix 3E)

Net Foreign Exchange = Gross Earnings of Foreign Exchange minus Total expenses /

payment / remittances of Foreign Exchange, relating to service sector in the Financial

year.

If the IEC holder is a manufacturer of goods as well as service provider, then the

foreign exchange earnings and Total expenses / payment / remittances shall be taken

into account for service sector only.

In order to claim reward under the scheme, Service provider shall have to have an

active IEC at the time of rendering such services for which rewards are claimed.


SEIS - Ineligible categories

Ineligible categories under SEIS :

(1)Foreign exchange remittances other than those earned for rendering of notified services

would not be counted for entitlement. Thus, other sources of foreign exchange earnings

such as equity or debt participation, donations, receipts of repayment of loans etc. and

any other inflow of foreign exchange, unrelated to rendering of service, would be

ineligible.

(2) Following shall not be taken into account for calculation of entitlement under scheme:

(a) Foreign Exchange remittances:

I. Related to Financial Services Sector

(i) Raising of all types of foreign currency Loans;

(ii) Export proceeds realization of clients;

(iii) Issuance of Foreign Equity through ADRs / GDRs or other similar instruments;



Ineligible categories under SEIS :

(iv) Issuance of foreign currency Bonds;

(v) Sale of securities and other financial instruments;

(vi) Other receivables not connected with services rendered by financial institutions; and

(b) Payments for services received from EEFC Account;

(c) Foreign exchange turnover by Healthcare Institutions like equity participation,

donations etc.

(d) Foreign exchange turnover by Educational Institutions like equity participation,

donations etc.

(e) Export turnover relating to services of units operating under EOU / EHTP / STPI / BTP

Schemes or supplies of services made to such units;

(f) Clubbing of turnover of services rendered by SEZ / EOU /EHTP/ STPI /BTP units with

turnover of DTA Service Providers;

(h) Foreign Exchange earnings for services provided by Airlines, Shipping lines service

providers plying from any foreign country X to any foreign country Y routes not

touching India at all.

(i) Service providers in Telecom Sector.


3.10 Entitlement under SEIS

Service Providers of eligible services shall be entitled to Duty Credit Scrip notified

rates (as given in Appendix 3D i.e. 3 % or 5% or 7% as applicable) on net foreign

exchange earned.

Free Foreign Exchange earned through international credit cards and other

instruments, as permitted by RBI shall also be taken into account for computation of

value of exports.

Effective date of schemes (MEIS and SEIS)

The schemes shall come into force with effect from the date of notification of this

Policy, i.e. the rewards under MEIS/SEIS shall be admissible for exports

made/services rendered on or after the date of notification of this Policy. (i.e.

01.04.2015)





S. No. SECTORS Central

product

Classification

(CPC) Code

Admissible rate in

% (on Net Foreign

Exchange earnings)

01.11.2017 to 31.03.2019

Admissible rate in

% (on Net Foreign

Exchange earnings)

01.04.2015 to

30.10.2017

1. BUSINESS SERVICES

A Professional services

a Legal services 861 7% 5%

b Accounting, auditing and

bookkeeping services

862 7% 5%

c Taxation services 863 7% 5%

d Architectural services 8671 7% 5%

e Engineering services

8672

7% 5%

f Integrated engineering services

8673

7% 5%

LIST OF SERVICES- APPENDIX 3D



.


S. No. SECTORS Central product

Classification

(CPC) Code

Admissible rate in

% (on Net Foreign

Exchange earnings)

01.11.2017 to 31.03.2019

Admissible rate in

% (on Net Foreign

Exchange earnings)

g Urban planning and landscape

architectural services

8674 7% 5%

h Medical and dental services 9312 7% 5%

i Veterinary services 932 7% 5%

j Services provided by midwives, nurses,

physiotherapists and paramedical

personnel

93191 7% 5%

B. Research and development services

a R&D services on natural sciences 851 7%

5%






product

Classification

(CPC) Code

Admissible rate in

% (on Net Foreign

Exchange earnings)

01.11.2017 to 31.03.2019

Admissible rate in

% (on Net Foreign

Exchange earnings)

b R&D services on social sciences

and humanities

852 7% 5%

c Interdisciplinary R&D services 853 7% 5%

C Rental/Leasing services

without operators

a Relating to ships 83103 7% 5%

b Relating to aircraft 83104 7% 5%

c Relating to other transport

equipment

83101,83102

83105

7% 5%

D Relating to other machinery and

equipment

83106-83109 7% 5%


CA. Hans Raj Chugh


.



product

Classification

(CPC) Code

Admissible rate in

% (on Net Foreign

Exchange earnings)

01.11.2017 to 31.03.2019

Admissible rate in

% (on Net Foreign

Exchange earnings)

D Other business services

a Advertising services 871 5% 3%

b Market research and public

opinion polling services

864 5% 3%

c Management consulting service 865 5% 3%

d Services related to management

consulting

866 5% 3%

e Technical testing and analysis

services

8676 5% 3%

f Services incidental to

agricultural, hunting and

forestry

881 5% 3%

g Services incidental to fishing 882 5% 3%



S. No. SECTORS Central product

Classification

(CPC) Code

Admissible rate in

% (on Net Foreign

Exchange earnings)

01.11.2017 to

31.03.2019

Admissible rate in

% (on Net Foreign

Exchange earnings)

h Services incidental to mining 883, 5115 5% 3%

i Services incidental to manufacturing 884, 885 5% 3%

j Services incidental to energy

distribution

887 5% 3%

k Placement and supply services of

personnel

872 5% 3%

l Investigation and security 873 5% 3%

m Related scientific and technical

consulting

services

8675 5% 3%

n Maintenance and repair of equipment

(not including maritime vessels, aircraft

or other transport equipment)

633, 8861-

8866

5% 3%

o Building- cleaning services 874 5% 3%



CA. Hans Raj Chugh


.



product

Classification

(CPC) Code

Admissible rate in

% (on Net Foreign

Exchange earnings)

01.11.2017 to 31.03.2019

Admissible rate in

% (on Net Foreign

Exchange earnings)

p Photographic services 875 5% 3%

q Packaging services 876 5% 3%

r Printing, publishing 88442 5% 3%

s Convention services 87909 5% 3%

2 COMMUNICATION

SERVICES

Audiovisual services

a Motion picture and video tape

production and distribution

service

9611 7% 5%

b Motion picture projection

service

9612 7%

5%




.


product

Classification

(CPC) Code

Admissible rate in

% (on Net Foreign

Exchange earnings)

01.11.2017 to 31.03.2019

Admissible rate in

% (on Net Foreign

Exchange earnings)

c Radio and television services 9613 7% 5%

d Radio and television

transmission services

7524 7% 5%

e Sound recording n. a. 7% 5%

3 CONSTRUCTION AND

RELATED

ENGINEERING SERVICES

A General Construction work for

building

512 7%

5%

B General Construction work for

Civil Engineering

513 7%

5%






product

Classification

(CPC) Code

Admissible rate in

% (on Net Foreign

Exchange earnings)

01.11.2017 to 31.03.2019

Admissible rate in

% (on Net Foreign

Exchange earnings)

C Installation and assembly work 514, 516 7% 5%

D Building completion and

finishing work

517 7% 5%

4 EDUCATIONAL SERVICES

(Please refer *Note 3)

A Primary education services 921 7% 5%

B Secondary education services 922 7% 5%

C Higher education services 923 7% 5%

D Adult education 924 7% 5%


CA. Hans Raj Chugh


.



product

Classification

(CPC) Code

Admissible rate in

% (on Net Foreign

Exchange earnings)

01.11.2017 to 31.03.2019

Admissible rate in

% (on Net Foreign

Exchange earnings)

5 ENVIRONMENTAL

SERVICES

A Sewage services 9401 7% 5%

B Refuse disposal services 9402 7% 5%

C Sanitation and similar services 9403 7% 5%

6 HEALTH-RELATED AND

SOCIAL SERVICES

A Hospital services 9311 7% 5%




.



product

Classification

(CPC) Code

Admissible rate in

% (on Net Foreign

Exchange earnings)

01.11.2017 to

31.03.2019

Admissible rate in

% (on Net Foreign

Exchange earnings)

7 TOURISM AND TRAVEL-

RELATED SERVICES

A Hotels and Restaurants

(including catering)

a Hotel 641-643 5% 3%

b Restaurants (including

catering)

641-643 5% 3%

B Travel agencies and tour

operators services

7471 7% 5%

C Tourist guides services 7472 7% 5%


36

CA. Hans Raj Chugh


.



product

Classification

(CPC) Code

Admissible rate in

% (on Net Foreign

Exchange earnings)

01.11.2017 to 31.03.2019

Admissible rate in

% (on Net Foreign

Exchange earnings)

8 RECREATIONAL,

CULTURAL AND

SPORTING SERVICES

(other than audiovisual services)

A Entertainment services

(including theatre, live bands

and circus services)

9619 7% 5%

B News agency services 962 7% 5%

C Libraries, archives, museums

and other cultural services

963 7% 5%

D Sporting and other recreational

services

964 7% 5%




.

*Note 4: Under Maritime Transport Services marked with *[9A (a), (b) and (c)], the reward shall be limited to Operations from India by Indian Flag Carriers only.


S.

No.

SECTORS Central product

Classification

(CPC) Code

Admissible rate in

% (on Net Foreign

Exchange earnings)

01.11.2017 to 31.03.2019

Admissible rate in

% (on Net Foreign

Exchange earnings)

9 TRANSPORT SERVICES

(Please refer *Note 4)

A Maritime Transport Services

a Passenger transportation* 7211 7% 5%

b Freight transportation* 7212 7% 5%

c Rental of vessels with crew * 7213 7% 5%

d Maintenance and repair of vessels 8868 7% 5%

e Pushing and towing services 7214 7% 5%

f Supporting services for maritime

transport

745 7% 5%




.


S.

No.

SECTORS Central

product

Classification

(CPC) Code

Admissible rate

in

% (on Net

Foreign

Exchange

earnings)

01.11.2017 to

31.03.2019

Admissible rate

in

% (on Net

Foreign

Exchange

earnings)

B Air transport services

a Rental of aircraft with crew 734 7% 5%

b Maintenance and repair of aircraft 8868 7% 5%

c Airport Operations and ground handling 7% 5%

C Road Transport Services

a Passenger transportation 7121, 7122 7% 5%

b Freight transportation 7123 7% 5%

c Rental of Commercial vehicles with operator 7124 7% 5%

d Maintenance and repair of road transport

equipment

6112, 8867 7% 5%

e Supporting services for road transport services 744 7% 5%




.


S.

No.

SECTORS Central

product

Classification

(CPC) Code

Admissible rate in

% (on Net Foreign

Exchange earnings)

01.11.2017 to 31.03.2019

Admissible rate in

% (on Net Foreign

Exchange earnings)

D Services Auxiliary To All Modes Of

Transport

a Cargo-handling services 741 7% 5%

b Storage and warehouse services 742 7% 5%

c Freight transport agency services 748 7% 5%




.



Services For the period Admissible Rate in

%

(on NFE)

Services Notified in appendix

3D/3E

01.04.2015 to 30.10.2017 3% or 5%


3D/3E-including ground

handling services

01.11.2017 to 31.03.2018 5% or 7%


3D/3E-including ground

handling services

31.03.2018 onwards 5% or 7%

Utilization of MEIS /SEIS Scrip

Freely transferable in open market.

Scrip can use for the payment of :-

Basic Customs Duty,

Safeguard Duty

Transitional Product Specific Safeguard duty

Antidumping duty

Scrip can also be use for payment of duties of Excise (on those items- not covered

under GST)

Scrip can also be use for payment of BCD and additional customs duty

(safeguard, antidumping etc.) on EO default for EPCG/Advance Authorization

and for payment of application fees/composition Fees .

Scrip CANNOT be used for payment of GST.


CENVAT/ Drawback

◦ Additional Customs duty specified under section 3(1),3(3) and 3(5) of Customs

Tariff act,1975 /excise duty paid in cash or through debit under duty credit scrip

shall be adjusted as CENVAT CREDIT OR DUTY DRAWBACK as per DoR

rules or notification.

◦ Basic Custom duty paid in cash or through debit under Duty Credit scrip shall

be adjusted for Duty Drawback as per DoR rules or notifications.

Import under lease financing

◦ Utilization of Duty Credit Scrip shall be permitted for payment of duty in case of

import of capital goods under lease financing in terms of provision in paragraph

2.34 of FTP.

Common Provisions for Exports from India Schemes (MEIS and

SEIS)


44

Status Holders

The nomenclature of Export House, Star Export House, Trading House, Star

Trading House, Premier Trading House certificate has been changed to One, Two,

Three, Four, Five Star Export House.

The criteria for export performance for recognition of status holder have been

changed from Rupees to US dollar earnings.

Based on Export Performance FOB / FOR (as converted) Value (in US $

million) during current and previous three year

CA. Hans Raj Chugh

45

Status Category

Export Performance FOB/FOR

(as converted) Value (in US $

million) during current and previous

three years

One Star Export House 3

Two Star Export House 25

Three Star Export House 100

Four Star Export House 500

Five Star Export House 2000

CA. Hans Raj Chugh

Status Category

46

Privileges of Status Holder

Status Holder shall be eligible for privileges as under:-

Authorization and Customs Clearances for both imports and exports may be granted

on self-declaration basis;

Input-Output norms may be fixed on priority within 60 days by the Norms

Committee;

Exemption from furnishing of Bank Guarantee for Schemes under FTP, unless

specified otherwise anywhere in FTP or HBP;

Exemption from compulsory negotiation of documents through banks. Remittance /

receipts, however, would be received through banking channels;

Two star and above Export houses shall be permitted to establish Export Warehouses

as per Department of Revenue guidelines.

Three Star and above Export House shall be entitled to get benefit of Accredited

Clients Programme (ACP) as per the guidelines of CBEC (website: http://cbec.gov.in).

CA. Hans Raj Chugh

47

Privileges of Status Holder

The status holders would be entitled to preferential treatment and priority in handling of their consignments by

the concerned agencies.

Manufacturers who are also status holders (Three Star/Four Star/Five Star) will be enabled to self-certify their

manufactured goods (as per their IEM/IL/LOI) as originating from India with a view to qualify for preferential

treatment under different preferential trading agreements (PTA), Free Trade Agreements (FTAs), Comprehensive

Economic Cooperation Agreements (CECA) and Comprehensive Economic ,Partnership Agreements (CEPA).

Subsequently, the scheme may be extended to remaining Status Holders.

Manufacturer exporters who are also Status Holders shall be eligible to self-certify their goods as originating from

India as per Para 2.108 (d) of Hand Book of Procedures.

Status holders shall be entitled to export freely exportable items on free of cost basis for export promotion subject

to an annual limit of Rs 1 crore or 2% of average annual export realization during preceding three licensing years

whichever is lower

CA. Hans Raj Chugh

Duty Exemption/Remission schemes

Duty exemption schemes

Advance Authorization (which includes Advance Authorization for Annual requirement scheme)

DFIA

Duty Remission schemes.

Duty drawback (DBK) scheme, administered by Department of

Revenue (DoR)


Duty exemption Schemes

Advance Authorization Scheme

For making available duty free Inputs required to manufacture the export product (making normal

wastage). Fuel ,oil , catalyst also allowed.

Inputs allowed as per Standard Input Output Norms with Actual User condition.

Inputs also allowed on the basis of self ratification scheme.

Facility available for Physical exports (including export to SEZ ),deemed exports and

Intermediate supplies.

Minimum 15% V.A.

Time period for import 12 months from the date of issue of Authorization.(one revalidation for 6

months may be granted)

Fulfillment of export obligation within 18 months from the date of issue of Authorization.

Extension in EOP allowed for a 6 months subject to payment of composition fees @0.5%


Duty exemption Schemes


Other Features:

Exemption from

Basic customs duty

Social welfare surcharge (SWS)

Integrated Goods & Services tax ( IGST upto 31st March, 2021)

Anti dumping & safeguard duty and transition product specific safeguard duty.

Actual user

Inputs cannot be transferred after EO completion (‘Actual User’)


Duty exemption schemes


Other Features:

Can be availed for Annual requirement if

Item notified in SION

Applicant has exports in last two FY.

Entitlement up to 300% of the FOB value of physical export/FOR in preceding

FY or 1 crore whichever is higher.

Facility of ARO or Back to Back L/C

EO period 18 months from date of issue of Authorization

EO extension

1st 6 months on 0.5% of the shortfall in EO,as composition fee

2nd 6 months on 0.5% per month composition fee,on unfulfilled EO (provided

50% of EO fufifilled in quantity as well as value.)

No further extension shall be allowed by RA


Duty Free Import Authorization (DFIA)

Permits duty free imports of raw materials, consumables, fuel (both as

input & for power generation), catalyst for exports/ intermediate supplies

or deemed exports

Basic Features:

◦ Based on SION

◦ 20% value addition

◦ Export shall be completed within 12 months


DUTY DRAWBACK

Drawback

Section-74 : Drawback allowable on re-export of duty-paid goods

read with Re-Export of Imported Goods (Drawback of Customs

Duties) Rules, 1995

Section-75 : Drawback on imported materials used in the

manufacture of goods which are exported read with the Customs

and Central Excise Duties Drawback Rules, 2017.

DUTY DRAWBACK

GOODS IMPORTED

CLEARANCE OF

GOODS FOR H/C

AFTER PAYMENT OF

IMPORT DUTY

EXPORT

REFUND OF IMPORT DUTY

i.e. DUTY DRAWBACK

DUTY DRAWBACK

Goods imported into India duty

Paid thereon

+

Export after processing.

Goods imported in India & duty

Paid thereon

+

Sec. 74 Sec75

Amount of DBK

export after use

Within 4 year or 1*1/2

year

as the case may be

Amount of DBK When

Export as such within 2 year

From the date of payment of duty

DBK= 98% of I.D

(satisfaction of the

Ac/Dc required)

Export as Normal Export / Baggage/ Post

1st Notification

i.e. goods=WCPT

2nd Notification

i.e. Car or Goods

3rd Notification

i.e. other goods

No. DBK shall

be allowed

Imported by Person

for his Personal & Private

use

DRAWBACK allowed of duties of customs

on any imported material used in

Manufacturing / processing of such

goods,

As the CG may direct

Import duty

Less: by 4%,3%,2.5%& 2% (for

each qtr or part thereof)

For 1st ,2nd ,3rd ,4th yr. respectively

Depending upon

Period of use

Section 74 Section 75

Meaning DBK Refund of Import duty paid on

such goods

Refund of

•Import duty- paid on

Imported Raw material

•Excise Duty paid on petroleum

products,

Goods eligible for DBK All goods Notified goods

Identity of goods exported Unchanged

(Since Export as such)

Changed

(since export after processing)

Rate of DBK As such-98%

After use-As per notification

I,II,III

Notified rate:

-all industry rate

-brand rate

-special brand rate

Period of usage As specified in notification No such restriction

No Duty Drawback

Section 76

1. In respect of any goods Market price < Duty drawback due < Rs.50

2. Central Govt. is of opinion that goods are likely to be smuggled back in India.

or

may be allowed subject to restriction & conditions.

Export Promotion Capital goods (EPCG) Scheme

Import of capital goods for pre production ,production and post production at zero custom duty.(except those specified in negative list in appendix 5F.

Also exempt from IGST upto 31st March,2021

Capital goods for the purpose of the EPCG scheme shall includes:

◦ Capital Goods as defined in Chapter 9 including in CKD/SKD condition thereof;

◦ Computer software systems;

◦ Spares, moulds, dies, jigs, fixtures, tools & refractories for initial lining and spare refractories; and

catalysts for initial charge plus one subsequent charge.

Import of capital goods for Project Imports notified by Central Board of Excise and Customs is also permitted under EPCG Scheme.

Import under EPCG Scheme shall be subject to an export obligation equivalent to 6 times of duty saved on capital goods, to be fulfilled in 6 years reckoned from date of issue of Authorization.

Authorization shall be valid for import for 18 months from the date of issue of Authorization. (Revalidation of EPCG Authorization shall not be permitted.)

Second hand capital goods shall not be permitted to be imported under EPCG Scheme.


Export Promotion Capital goods (EPCG) Scheme- Negative list (Appendix 5F)


Sr.

no.

Name of item Importability under EPCG

1. cables Permitted only as an integral part of Capital Goods

2. Railway wagons(excluding specialized wagons) Not permitted

3. Tractors Not permitted

4. Trucks/Tippers/Dumpers/ And Spares there of including tyres. Permitted only to mining sector

5. Motor Cars, Sports Utility Vehicle/ All purpose vehicles. Not permitted

6. Airport Ground handling Equipments. Not permitted

7. Furniture, carpets, crockery, marble, chandelier, tiles, flooring,

doors for rooms, fixing panels.

Permitted only to hotel industry

8. Construction equipments viz. cranes etc. Permitted only for providing services

9. All construction materials like sheds, cement, steel. Not permitted

10. Computers and printers Not permitted

11. All second hand capital goods Not permitted

12. Capital goods (including captive plants and power generator

sets of any kind) for export of electrical energy (power)

:supply of electrical

Export Promotion Capital goods (EPCG) Scheme

Export obligation

Specific Export obligation :- 6 times of duty saved amount to be fulfilled in 6 years.

Average Export obligation:

EO under the scheme shall be, over and above, the average level of exports achieved by

the applicant in the preceding three licensing years for the same and similar products

within the overall EO period .

In case of indigenous sourcing of Capital Goods, specific EO shall be 25% less than the

normal EO

Note :-Shipments under Advance Authorization, DFIA, Drawback scheme or reward

schemes under Chapter 3 of FTP; would also count for fulfillment of EO under

EPCG Scheme.


Post-Export EPCG Duty Credit Scrips

Post Export EPCG Duty Credit Scrip(s) shall be available to exporters who intend to import

capital goods on full payment of applicable duties in cash and choose to opt for this scheme.

Basic Customs duty paid on Capital Goods shall be remitted in the form of freely transferable

duty credit scrip(s), similar to those issued under Chapter 3 of FTP.

Specific EO shall be 85% of the applicable specific EO under the EPCG Scheme. However,

average EO shall remain unchanged.

Duty remission shall be in proportion to the EO fulfilled.

All provisions for utilization of scrips issued under Chapter 3 of FTP shall also be applicable to

Post Export EPCG Duty Credit Scrip (s).

All provisions of the existing EPCG Scheme shall apply insofar as they are not inconsistent with

this scheme.


Transport & Marketing Assistance (TMA)

Introduction & objective

Introduction:- New Chapter 7 (A) / Scheme is added in the Foreign Trade Policy

2015-20 by the Department of Commerce, Ministry of Commerce & Industry,

Govt. of India. vide their notification no.58/2015-20 dated 29 march,2019 read

with DOC’s notification no.17/3/2018-Ep (Agri.IV) dated 27.02.2019

Objective:-the transport and marketing for specified agricultural products scheme

aims to provide assistance for the international component of freight and

marketing of agricultural produce which is likely to mitigate disadvantage of higher

cost of transportation of export of specified a agricultural products due to trans-

shipment and to promote brand recognition for Indian agricultural products in the

specified overseas markets.

Coverage:

All exporters, duly registered with relevant Export Promotion Council as per Foreign Trade Policy, of eligible agriculture products shall be covered under this scheme.

Eligible agriculture products- products covered under HSN chapters 1 to 24 ( exceptions given blow).

The assistance, as notified rates, will be available for export of eligible agriculture products to the permissible Countries, as specified from time to time.

List of Agriculture products not eligible under TMA Chapter HS

Code Description

Chapter 1, 2 & 5

All HS Codes

-Live animals -Meat and Edible Meat Offal -Products of Animal Origin, not elsewhere specified or included

Chapter 3 030617 -other shrimps and prawns : Chapter 4 0401 -Milk and cream, not concentrated nor containing added sugar or other

sweetening matter. 0402 -Milk and cream, concentrated or containing added sugar or other sweetening

matter. 0403 -Buttermilk, curdled milk and cream, yogurt, kephir, and other fermented or

acidified milk and cream, whether or not concentrated or containing added sugar or other sweetening matter or flavored or containing g added fruit, nuts or cocoa.

0404 -whey, whether or not concentrated or containing added sugar or other sweetening matter, products consisting of natural milk constituents, whether or not containing added sugar or other sweetening matter, not elsewhere specified or included. Continue…..

List of Agriculture products not eligible under TMA Chapter HS Code Description

0405 -Butter and other fats and oils derived from milk; dairy spreads

0406 -Cheese and curd

Chapter 7 0703 -Onions, shallots, garlic, leeks, and other alliaceous vegetables, fresh or chilled

Chapter 10 1001, 1006

-Wheat and Meslin -Rice

Chapter 13 & 14

All HS Codes -Lac; Gums, Resins and other vegetable saps and Extracts -Vegetable plaiting Materials; Vegetable Products not elsewhere specified or included

Chapter 17 1701, 1703

-Cane or Beet Sugar or chemically pure Sucrose, In solid form-Raw sugar not containing Added flavoring or Colouring matter -Molasses resulting from the extraction or refining of sugar

Chapters 22 and 24

All HS Codes -Beverages, Spirits and Vinegar -Tobacco and Manufactured Tobacco Substitutes

Notified Rates:

Region Amount per TEU (Normal)

Amount per TEU (Reefer)

By Air Amount per (Kilogram)

West Africa 11200 19600 0.84

East Africa 11200 21000 0.84

EU 9800 21000 1.120

Gulf 8400 14000 0.70

North America 21000 28700 2.80

ASEAN 5600 12600 0.70

Russia & CIS 12600 22400 0.70

Far East 8400 12250 0.84

Oceana 16800 24500 2.80

China 0 12600 0.84

South America 23800 31500 3.50

Permissible Countries

Region Country Name

West Africa Benin, Mali, Burkina, Faso, Mauritania, Ivory, Coast, Niger, Cape, Verde, Nigeria

EU Albania, Andorra, Austria, Belgium, Bosnia and Herzegovina, Bulgaria, Croatia, Cyprus, Czech

Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy,

Kosovo, Latvia, Liechtenstein, Lithuania, Luxembourg, Macedonia, Malta, Monaco, Montenegro,

Netherlands, Norway, Poland, Portugal, Romania, San Marino, Serbia, Slovakia, Slovenia, Spain,

Sweden, Switzerland, Turkey, United Kingdom, Vatican City

Gulf Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, United Arab Emirates

North America

Antigua and Barbuda, Bahamas, Barbados, Belize, Canada, Costa Rica, Cuba, Dominica,

Dominican Republic, EI Salvador, Grenada, Guatemala, Haiti, Honduras, Jamaica, Mexico,

Nicaragua, Panama, Saint Kitts and Nevis, Saint Lycia, Saint Vincent and the Grenadines, Trinidad

and Tobago, United states of America

Region Country Name

ASEAN Brunei, Darussalam, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, Vietnam

Russia & CIS Armenia, Azerbaijan, Belarus, Estonia, Georgia, Kazakhstan, Kyrgyzstan, Latvia, Lithuania, Moldova, Russia, Tajikistan, Turkmenistan, Ukraine, Uzbekistan

Far East Japan, North Korea, South Korea

Oceana Australia, Fiji, Kiribati, Marshall Islands, Micronesia , Nauru, New Zealand, Palau, Papua, New Guinea, Samoa, Solomon Islands, Tonga, Tuvalu, Vanuatu

China PRC China, Hong Kong, Taiwan

South America

Argentina, Bolivia, Brazil, Chile, Colombia, Ecuador, Guyana, Peru, Paraguay, Suriname, Uruguay, Venzuela

Permissible Countries

Applicability: -

The Scheme would be applicable for a period as specified from time to time. Presently the scheme would be available for exports affected from 01.03.2019 to 31.03.2021

Pattern of Assistance: - Assistance under TMA would be provided in Cash through direct bank transfer as part of reimbursement of freight paid.FOB supplies where no freight is paid by Indian exporter are not covered under this scheme

Categories of export ineligible for TMA:- The following exports categories/sectors shall be ineligible under this scheme

Products exported from SEZs/EOUs/EHTPs/STPs/BTPs/FTWZs;

SEZ/EOU/EHTPs/STPs/BTPs/FTWZs products exported through DTA units.

Exported of imported goods covered under paragraph 2.46 of FTP.

Export through trans shipment, i.e. exports that are originating in third Country but

trans shipped through India.

Items, which are restricted or prohibited for export under schedule -2 of Export Policy

in ITC (HS), unless specifically notified.

Export Products which are subject to minimum Export Price or export duty, unless

specifically;

Export of Goods through Courier or foreign post offices using e-commerce.

Procedure for Availing Assistance under Scheme Application for claiming assistance under this scheme can be filed by registered and

eligible exporter, having a valid RCMC issued by the competent Authority.

The application can be made by corporate office/Registered office/Head office/Branch office or Manufacturing unit.

Application for TMA would be filed to the RAs headed by Additional DGFT.

The application shall be filled up online on DGFT’s website (http://dgft.gov.in/) along with the application fee as prescribed in Appendix-2K .

A physical copy of the print out of ANF-7(A)A along with prescribed documents shall also be filed manually with RA concerned within 30 days from the date of submission of online application using e-commerce..

http://dgft.gov.in/

http://dgft.gov.in/

http://dgft.gov.in/

http://dgft.gov.in/

http://dgft.gov.in/

http://dgft.gov.in/

http://dgft.gov.in/

http://dgft.gov.in/

Procedure for Availing Assistance under Scheme

Application for claim of TMA will be made on quarterly basis i.e. for the shipments made in a particular quarter, online claims should be filed within a period of one year from the completion of the quarter in which exports have been made .

TMA claim would be available on shipment basis. All claims for shipments made in a particular quarter should be bunched together and submitted as a single application along with Chartered Accountant (CA) / Cost and Work Accountant (ICWA) / Company Secretary (CS) certificate in the format as given in the Annexure A to ANF-7(A)A.

Non-submission of the physical copy of the application along with the prescribed documents within 30 days after filing online, shall be result in non-acceptance of application by DGFT and shall be rejected

Documents Required:-

All applications should be submitted in ANF-7(A)A (duly filled up online) along with copies of the following documents duly self certified

EP Copy of shipping bill(s) / Airway bill(s);

Commercial invoice;

On board bill of lading, in case of shipment by sea;

Certificate of chartered accountant (CA) / cost and works Accountant (ICWA) / Company Secretary (CS) .

Proof of landing .

Exporter may refer to the guidelines / instruction given in Application form before filling online application and submitting physical copy with RA.

Key Points

Mandatory to apply online at the www.dgft.gov.in portal with concerned Jurisdictional RA headed by Addl. DGFT.

No document is required to be uploaded while filing the application on DGFT's website.

A printout of the uploaded application along with the self certified copies of the requisite documents should be submitted to the concerned RA within 30 days of submission of online application.

Separate applications are required to be filed for separate quarters in a Licensing year based on date of export as mentioned in Shipping Bill.

The application can be filed within one year of completion of a quarter after that the application would become time barred .

Key Points-

The Assistance would be provided in cash through direct bank transfer.

TMA will be based on the freight paid for a full Twenty-feet Equivalent Unit (TEU) containers. A forty feet container will be treated as two TEUs.

The scheme is not available for Less than Container Load (LCL); container having both eligible and ineligible category of cargo and for the cargo if shipped I bulk/break bulk mode.

Assistance for products exported by air would be based on per ton freight charges on net weight of the export cargo, calculated on the full ton basis, ignoring any fraction thereof.

Key Points-

FOB supplies where no freight is paid by Indian exporters are not covered under this scheme.

The scheme is admissible for the exports made through EDI ports only.

The Applicants are required to submit the original copies of CA Certificate (Annexure A) and

Proof of landing certificate for all exports in the application for exports made (Annexure B).

Fee for application for reimbursement of benefits under Transport and Marketing Assistance (TMA) will

be Rs. 1000/- notified vide Public Notice No. 02/2015-20 Dt. 05.04.2019

RECENT DEVELOPMENTS UNDER FOREIGN TRADE POLICY & CUSTOMS LAW

Transfer Release Advice (TRA) facility has been withdrawn for

MElS/SElS scrips issued on or after 10.04.2019.

Validity period of export authorization for restricted (NON-

SCOMET) goods enhanced from 12 months to 24 months.

W.e.f. 1 April, 2019 import import of Peas & Pulses Restricted .

Issuance of physical copy of MEIS/SEIS scrips for EDI ports with

effect from 10.4.2019 are discontinued.

-Discontinuation of printing of Advance Authorisations/Export Promotion Capital Goods (EPCG) Authorizations on security paper by DGFT.

MOT has notified, New Scheme called scheme for Rebate of State and Central Taxes and Levies on export of garments and mad-ups (RoSCTL). Existing rebate of state levies (ROSL)has been discontinued w.e.f 07.03.2019. RoSCTL, the benefit to exporters shall be given by DGFT in form of MEIS type duty credit scrips

Export promotion : Steps taken so far

Interest Equalization Scheme (IES) on pre and post shipment rupee export credit

introduced from 01.04.2015 providing interest equalization at 3% to exporters on 416

lines and for all MSME exporters. The scheme has been extended till 31.03.21.

The IES rate increased to 5% for MSME exporters with effect from 02.11.2018 and

merchant exporters were covered under the scheme with effect from 02.01.2019.

Interest Equalization Scheme (IES)

Export promotion : Steps taken so far

“Trade Infrastructure for Export Scheme (TIES)” launched with effect from 1st April

2017 to address the export infrastructure gaps in the country.

Agriculture Export Policy” launched on 6th December, 2018 with an aim to double

farmers’ income by 2022

“Transport and Marketing Assistance” (TMA) scheme launched in 05th March 2019

for mitigating disadvantage of higher cost of transportation for export of specified

agriculture products

Scheme for Rebate of State and Central Taxes and Levies (RoSCTL) covering export

of garments and made-ups notified on 07.03.2019 providing refund of duties/taxes at

higher rates.

New Measures to Boost Exports : Incentives and Taxation

1. Extend the scheme of Reimbursement of Taxes & Duties for Export promotion

Scheme for Remission of Duties or Taxes on Export Product (RoDTEP) will replace

MEIS

Existing dispensation in textiles of MEIS + old ROSL will continue up to 31.12.2019

Textiles and all other sectors which currently enjoy incentives upto 2% over MEIS

will transit into RODTEP from 01.01.2020

In effect, RODTEP will more than adequately incentivize exporters than existing

schemes put together.

Revenue foregone projected at up to Rs. 50,000 crores


2.Fully automated electronic refund route for Input Tax Credits (ITC) in GST

Fully electronic refund module (FORM GSAT RFD-01) for

quick and automated refund of ITC nearing completion and

will be implemented by end September 2019.

This is expected to monitor and speed up ITC refunds

3. Expanding scope of Export Credit Insurance Scheme (ECIS) by ECGC Export Credit Guarantee Corporation (ECGC) will expand the scope of ECIS

Will offer higher insurance cover to banks lending working capital for exports.

Premium incidence for MSMEs will be moderated suitably

It is expected that the initiative will cost about Rs 1700 cr per annum

This will enable reduction in overall cost of export credit including interest rates,

especially to MSMEs


Revised Priority Sector Lending (PSL) norms for Export Credit

Effective monitoring of Export Financing by Department of Commerce

Leverage technology to reduce “Time to Export or Turn-around time”


Import under GST

Liable for IGST

IGST on [Transaction value + BCD ]

Import is Inter state supply

The import of goods has been defined in the IGST Act, 2017 as bringing goods into

India from a place outside India

Article 269A mandates that supply of goods, or of services, or both in the course of

import into the territory of India shall be deemed to be supply of goods, or of

services, or both in the course of inter-State trade or commerce. So import of

goods or services will be treated as deemed inter-State supplies and would be subject

to Integrated tax in addition to the applicable Custom duties.

The integrated tax on goods shall be in addition to the applicable Basic Customs Duty

(BCD) which is levied as per the Customs Tariff Act.

In addition, GST compensation cess, may also be leviable on certain luxury and

demerit goods under the Goods and Services Tax (Compensation to States) Cess Act,

2017.

Valuation of Import for IGST & GST Cess

the value of the goods for the purpose of levying Integrated tax shall be

assessable value plus Customs Duty levied under the Act, and any other

duty chargeable on the said goods under any law for the time being

in force as an addition to.

The value of the imported article for the purpose of levying GST-Cess shall be

assessable value plus Basic Customs Duty levied under the Act, and any sum

chargeable on that goods under any law for the time being in force as an

addition to, and in the same manner as, a duty of customs.

The integrated tax paid shall not be added to the value for the purpose of

calculating cess.

ACTIVITIES OR TRANSACTIONS WHICH SHALL

BE TREATED NEITHER AS A SUPPLY OF GOODS

NOR A SUPPLY OF SERVICES-Schedule-III

Supply of warehoused goods to any person

before clearance for home consumption

High Sea Sale

FAQs

We get order from a foreign agent abroad to

whom we pay commission. Will it be taxable under

GST?

The foreign agent, who facilitates the supply of goods, is included

within the definition of intermediary. The place of supply of service

for services provided by intermediary would be the location of

service provider, i.e. the place where he is registered. Since a foreign

agent is located outside India and not registered in India, the

commission paid to him will not be taxable.

FAQs

Whether commission received by Indian Buying

Agent from foreign customer in foreign currency

is exempted from GST? Does Buying Agent need

to register for GST?

The commission received by buying agent in

India will be taxable. The buying agent should

register so that he/she can claim ITC to lessen

his/her liability by using ITC.

FAQs

How can IGST liability on imports or on inter-

state supply be settled?

IGST on imports has to be paid in cash only as it is charged on

reverse charge. The inter-state IGST can be paid by utilizing ITC

to the extent available and balance by cash. The use of ITC for

payment of IGST will be done in the following order: Firstly ITC

of IGST shall be used for payment of IGST. Once ITC of IGST is

exhausted, the ITC of CGST shall be used. If ITC of both IGST

and CGST are exhausted, ITC of SGST shall be used. Remaining

IGST liability shall be discharged in cash.

‘‘import of goods” & ‘‘import of services”

• ‘‘import of goods” means bringing goods into India from a place outside India;

• ‘‘import of services” means the supply of any service, where––

(i) the supplier of service is located outside India;

(ii) the recipient of service is located in India; and

(iii) the place of supply of service is in India;

‘‘import of services”

Outside India Location of Supplier

In India Location of recipient

In India Place of supply

Conditions

“export of goods” & “export of services”

“export of goods” means taking goods out of India to a place outside India;

“export of services” means the supply of any service when,––

(I) the supplier of service is located in India;

(ii) the recipient of service is located outside India;

(iii) the place of supply of service is outside India;

(iv) the payment for such service has been received by the supplier of service in convertible

foreign exchange; and

(v) the supplier of service and the recipient of service are not merely establishments of a distinct

person in accordance with Explanation 1 in section 8;

“export of services”

In India Location of Supplier

Outside India Location of recipient

Outside India Place of supply

Conditions

In convertible Foreign Exchange Payment

Not merely establishment of distinct

person Supplier & recipient

Import or Export : Inter state supply

• import of goods,

• import of services,

• export of goods,

• export of services,

• Supply of goods/services to or by a SEZ developer/unit; or

shall be treated to be a supply of services in the course of inter-State trade or

commerce

Place of supply : ‘‘import of goods” & “export of goods”

• The place of supply of goods,––

(a) imported into India shall be the location of the importer;

(b) exported from India shall be the location outside India.

Section 12 of IGST : Place of supply of services where location of supplier and recipient is in India.

Section 13 of IGST : Place of supply of services where location of supplier or location of recipient is

outside India.

Except in case of notified services place of supply of services shall be the location of recipient of

services.

“zero rated supply”

• export of goods or services

• supply of goods or services to SEZ developer/unit.

credit of input tax may be availed for making zero-rated supplies even if such supply is exempt

supply

Refund of Unutilized ITC

• Refund of unutilized input tax credit is allowed only in following two cases:

• Zero rated supplies made without payment of tax

• Inverted duty structure

Option for zero rated supply

• Under Bond or Letter of Undertaking without payment of integrated tax and claim refund of

unutilized input tax credit.

• On payment of integrated tax and claim refund of such tax paid.

Deemed exports - Goods

Deemed exports • In terms of Section 2(39) & 147 of the CGST Act, certain supplies of goods will be deemed exports where goods

(manufactured in India) do not leave India & the payment for such supplies is received either in Indian rupees or

in convertible foreign exchange.

• Manufacture is defined under Section 2(72) of CGST Act, means processing of raw material or inputs in any

manner that results in emergence of new product having a distinct name, character and use

Categories of supply of goods notified as Deemed Exports

1 Supply of goods against Advance Authorization

2 Supply of capital goods against EPCG Authorization

3 Supply of goods to EOU Unit

4 Supply of gold by a Bank or PSU against Advance Authorization.

(Notification No. 48/2017-Central Tax DATED 18th October, 2017)

Rule 89 of the CGST Rules, 2017 as amended vide Notification No. 47/2017- Central Tax dated 18.10.2017 allows either

the recipient or supplier of such supplies to claim refund of tax paid thereon. Deemed export to be made on payment of

Tax which is allowed to be refunded.

Import as Baggage:

• Passenger Baggage are exempted from IGST as well as compensation cess.

• The basic customs duty at the rate of 35% and the applicable education cess shall be

leviable on the value which is in excess of the duty free allowances provided under the

Baggage Rules, 2016

Goods supplied while being deposited in a customs bonded warehouse

• Circular No. 46/2017-Customs dated 24.11.2017

• Circular No. 3/1/2018-IGST dated 25.05.2018

• Integrated tax shall be levied and collected at the time of final clearance of the

warehoused goods for home consumption i.e., at the time of filing the ex-bond bill of entry.

• The supply of goods before their clearance from the warehouse would not be subject to the

levy of integrated tax.

• Integrated Tax would be levied and collected only when the warehoused goods are cleared

for home consumption from the customs bonded warehouse.

Merchant Export Notification No. 40/2017 Dated 23rd October, 2017

Rate of GST on supply of taxable goods by a registered supplier to a registered recipient for

export :

• Intra State Supply

• - CGST 0.05%

• - SGST 0.05%

• Inter State Supply

• IGST @ 0.10%

Merchant Export Notification No. 40/2017 Dated 23rd October, 2017

Conditions :

1. Registered Supplier shall supply the goods to registered recipient on a tax invoice;

2. Registered recipient shall export the goods within a period of ninety days.

3. Recipient shall indicate the tax invoice no and GSTN of supplier in tax invoice.

4. Recipient shall be registered with EPC.

5. PO raised by the recipient shall be submitted to the tax officer of supplier.

6. Goods shall directly move from supplier to the Port/ICD/Air Port/LCS or Registered warehouse from

where goods to moved to Port/ICD/Air Port/LCS .

7. In case of multiple supplier goods shall moved to registered warehouse for aggregation then moved to

Port/ICD/Air Port/LCS .

8. Recipient shall submit proof of export (S/B, ER, EGM) to supplier as well as tax officer of supplier.

No IGST on inter-State supply of services to Nepal and Bhutan if payment made in

INR

• Supply of services having place of supply in Nepal or Bhutan,

against payment in Indian Rupees exempted vide notification

no.42/2017-integrated tax (rate), dated 27-10-2017

GST & Foreign Trade Policy

• IGST is exempted on import against EPCG

• IGST is exempted on import against Advance Authorization

• IGST is exempted on import against MEIS & SEIS

Rebate of State and Central Embedded Taxes (RoSCTL)

About the Scheme

Rebate of State and Central Taxes and Levies (RoSCTL) is the scheme to rebate all

embedded State and Central Taxes and Levies on garments and made-ups to enhance

competitiveness of these sectors at notified rates and value caps.

Garments shall mean goods falling under Chapters 61 or 62 of the Schedule of All

Industry Rates (AIR) of Drawback.

Made-ups shall mean goods falling under chapter 63 of the Schedule of All Industry

Rates (AIR) of drawback excluding tariff items 6308, 6309, 6310 and goods in tariff

items 9404 that are excluded from drawback tariff item 6304.

Value in relation to exported garments and made-ups shall be the Free on Board (FOB)

value

Benefit to Exporters

Rebate of State Taxes and Levies -VAT on fuel used in transportation, captive

power, farm sector, mandi tax, duty of electricity, stamp duty on export

documents, embedded SGST paid on inputs such as pesticides, fertilizers etc.

used in production of raw cotton, purchases from unregistered dealers, coal

used in production of electricity and inputs for transport sector.

Rebate of Central Taxes and Levies-central excise duty on fuel used in

transportation, embedded CGST paid on inputs such as pesticides, fertilizer etc.

used in production of raw cotton, purchases from unregistered dealers, inputs

for transport sector and embedded CGST and Compensation Cess on coal used

in production of electricity


Validity of Scheme

Until such time that the RoSCTL Scheme is merged with Remission

of Duties and Taxes on Exported Products (RoDTEP) Scheme

The RoSCTL Rates are given as follows:-

Schedule- 1 - Rates of State taxes & levies.

Schedule- 2 - Rates of embedded Central levies.


Documents required to apply for RoSCTL Scheme

Below documents are required, to process the online application for RoSCTL

scheme:

Shipping Bill Copy

DGFT Digital Signature

Valid RCMC (Registration Cum Membership Certificate)

Procedure to apply for RoSCTL scheme: The procedures to apply for RoSCTL scheme are as follows:

The Applicant has to fill an online application using a digital signature.

Linking of E-BRC’s is not required for applying the RoSCTL application.

50 shipping bills would be allowed in 1 application.

As per Para, 3.09 (HBP) Facility of split scrips is available.

The Applicant can choose the port of registration for EDI ports from where export is

made.

Separate applications to be made for EDI and non EDI ports.

If the Applicant is under DEL (Denied Entities List) list, he/she can’t make an application.

RoSCTL Licenses will be valid for 24 months from the date of issue.

The Accounting Profession:

Statutory audit are reserved and are regulated by law.

Non-statutory audit or management consultancy are not regulated

as not being reserved to specific practitioners.

Accounting provide Value-added information to support financial

lending decisions, mergers and acquisitions, stock market

development, privatization of state owned enterprises, valuation

of public assets, attraction of foreign direct investment, audit of

foreign firms, and improved efficiency of tax collection.

It is expected a greater integration in the market for accounting

services.

Complain and Trade Dispute

Exporter need to project a good image of the country abroad to

promote exports.

To Maintaining and enduring relationship with the foreign buyer

complain or trade disputes whenever arise need to be settled

amicably.

To deal with the complain and dispute a Committee on Quality

Complaints and Trade Disputes (CQCTS) constituted in 22

regional office of DGFT all across the country with nodal officer

at Head office in Udyog Bhawan.

Thank You

Virtual Webinar on Overview of Foreign Trade Policy ...

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