DGFT Says No to Exporters Demand for Dual Currency Rates

The Federation of Indian Export Organisation (FIEO) organized an Open House Meet at FIEO’s Niryat Bhawan, New Delhi on January 15, 2008, with a DGFT team led by its chief Mr. R. S. Gujral to seek feedback from the exporters for the next Annual Supplement to the Foreign Trade Policy which is usually announced towards the end of the financial year.

The Director General of Foreign Trade Mr. R.S Gujral, during his address at the Open House on Foreign Trade Policy organized by FIEO said that the Department of Commerce was seriously concerned over exports being affected by rupee appreciation against the dollar and said that the DGFT was seeking sector-wise export data to ascertain the impact. He was of the view that the products which enjoy monopoly or higher profit margins were not affected much.

Explaining the position of the Department of Commerce on various suggestions made by the exporting community to mitigate the impact of stronger rupee, Mr. Gujral said there were certain constraints in raising the DEPB or Drawback rate which had come down with the reduction in customs duties.

On dual exchange rate, he said the government was not willing to introduce this and the exporters should resort to alternative techniques like hedging, factoring, invoicing in other currencies like Euro, Sterling, Yen, etc. This depends on the bargaining power of the exporter to negotiate with the buyers.

On exporters’ request for streamlining the guidelines for refund of drawback in cases where export payment has not been realized within 180 days as different banks follow different procedures, Mr. Gujral assured that the matter would be taken up with the Department of Revenue and also with the RBI.

Earlier, while welcoming the DGFT and his team, Dr. R.K. Dhawan, Northern Region Chairman of FIEO, appealed to the Government to reduce the Export Obligation undertaken by the exporters in case of Advance Licenses and EPCG Licences saying that most of the exports were invoiced in dollar and hence exporters were facing difficulties in fulfilling their Export Obligation.

Dr. Dhawan added that Export Obligation under the EPCG Scheme is linked with the customs duty saved but past average is linked with fob value of export which is quite unfair. He suggested that the exporters who have fulfilled their EO against the import of capital goods under the EPCG Scheme should be given one time amnesty with respect to average export by giving them some rebate.

Dr. Dhawan demanded that Customs duty of 5% under EPCG Scheme should be converted into zero duty. He stressed the need for making the EPCG scheme more attractive to accelerate export growth. According to him, providing rebate in export obligation in cases where invoicing is done in currencies other than dollar would provide some relief to the exporters.

Further, in the meeting following issues related to Foreign Trade Policy were taken into considered:

· Focus Product Scheme.
· Online application for Focus Market and Focus Product Scheme.
· Insertion of ICD Bhadohi and Dadri Ports in Focus Product Scheme.
· Option to endorse new Supporting Manufacturer/Job Manufacturer in Target Plus Scheme Certificate.
· Relief in import of Coconut Oil under Advance License.
· Advance License for Intermediate Supplies.
· Policy Circular No.20 (RE-2007) 2004-2009 dated December, 2007.
· One time amnesty/relaxation for grant of DEPB in delayed cases.
· Mentioning of Date of Shipment Bills in DGFT Website.
· Permission to use Duty Credits Scrips issued under DFCE & Target Plus Scheme for clearance of Import of Capital Goods under EPCG Scheme.
· Foreign Exchange counted towards fulfillment of Export Obligation not eligible for benefits under Served from India Scheme.
· Subsuming of EPCG License
· Option of Installation Certificate under EPCG Scheme.
· One time amnesty in the fulfillment of Average Level of Export Performance under EPCG.
· Sourcing of Capital Goods from STPs.
· Application of Public Notice No.94 dt. 1.1.2008 to all EPCG Licences.
· Introduction of Zero Duty EPCG Scheme.
· Maintenance of Annual Average under EPCG.
· No option to pay CVD in cash for EPCG and Advance Authorization.
· Dual work in cancellation of BG/Bonds with Customs After redemption with DGFT.
· Deemed Export Benefit against Supply of Cement and Steel required for setting up of Mega Power Projects.
· Insistence on Certification/claim of Deemed Export Benefit.
· Deemed Export Benefits for goods importable at Zero Duty.
· Benefits for supplies made to SEZ Units.
· Fixation of time period for verification of documents.
· RCMC for availing Foreign Trade Policy benefits.
· Ban on Export on a specific item.
· Removal of Registration for Import of Brass Scrap.
· Customs Verification of Duty Free Certificate under Focus Marketing Scheme.
· Delay in uploading of Data on ICEGATE.
· Simultaneous availment of full Duty Drawback and refund of Service Tax on Exports of Goods.
· Applicability of Drawback under DEPB Scheme.
· Credit of Duty Drawback arrears to the exporters account.
· Exemption of Safety Footwear from the purview of Central Excise and VAT.
· Exemption of Textile Cess on all Textile and Textile Machinery.

The DGFT team included Mr. Ajai Sahai, Director General, FIEO, Mr. Amitabh Jain, Zonal Jt. DGFT, Mr. S.R. Reddy, Jt. DGFT, Mr. Tapan Majumdar, Jt. DGFT, Mr. Bal Gangadharan, Addl. DGFT and Mr. A.K Singh, Jt. DGFT.