Schemes for Electronics and Software Exports
Duty Drawback Scheme
Exporters are eligible for reimbursement of all custom duty paid on imported inputs of an export product. In a few cases, adhoc quantum of duty drawback has been fixed to facilitate quick reimbursement. In other cases the exporter has to submit his claims for re-imbursement with supporting evidence to the Commissioner (Duty Drawback) in the Department of Revenue, Ministry of Finance. So far Duty Drawback Rates for 77 electronic items have been fixed to facilitate the exporters.
Duty Exemption Scheme
The scheme consists of Duty Free Licence, Annual Advance Licence and Duty Entitlement Pass Book ( DEPB ).
Duty Free License
Duty Free License include Advance License, Advance Intermediate License and Special Imprest License. Import of inputs which are physically incorporated in the exported product ( making normal allowance for wastage ) are permitted against a duty free licence. Application for duty exemption has to be filed in the prescribed proforma with the Office of the Licensing Authority of Directorate General of Foreign Trade (DGFT) under whose juridiction the applicant falls.
Exporters are eligible for the Customs Duty Free Licenses against specific order or on production programme on the basis of upto 100% of the average FOB value of their exports in the preceding three licensing years. Such licence is issued in accordance with the policy and procedure in force on the date of issue of the licence and is subject to the fullfilment of time bound export obligation and value addition as may be specified.
A Duty Free license needs to specify the following :
- The name and description of the items to be imported and exported.
- Quantity of each item to be imported or if the quantity can not be indicated the value of the item.
- The CIF value of imports.
- The FOB value and quantity of export product.
Advance License
An Advance Licence is granted to a merchant-exporter or manufacturer-exporter for the import of inputs required for the manufacture of goods without payment of basic customs duty. However, such inputs shall be subject to the payment of additional customs duty equal to the payment of additional customs duty equal to the excise duty at the time of import, which shall be adjusted as specified in the policy. Manufacturer-exporters as well as merchant-exporters are also exempt advance licence and/or material imported thereunder is not transferred even after completion of export obligation. Standard input/output norms for 227 electronic items have been fixed.
The eligible exporters of Electronic products also have an option to avail the Special Advance Licensing Scheme for export of electronic products. The silent features of this scheme are given in this chapter.
In the revised EXIM policy in force from April 1, 1999, a provision for Annual Advance Licence has been made to reduce the avoidable interface between the exporter and the DGFT. This facility provides the necessary flexibility in the import of duty free inputs. The exporter would now be able to import any prescribed inputs as per input-output norms right through the year without approaching DGFT. The licence would be issued without stipulation of minimum value addition. In such cases where self-declaration. They will not have to await the decision of Regional Advance Licensing Committee (RALC)/Zonal Advance Licensing Committee (ZALC) for fixation of adhoc norms. The items and quantities permitted against such licences would be subject to subsequent fixation of norms by the Headquarters Special Advance Licensing Committee (SALC).
Advance Intermediate License
An Advance Intermediate License is granted to a manufacturer-exporter for the import of inputs required in the manufacture of goods to be supplied to the ultimate exporter holding an Advance licence/Special Imprest Licence.
Special Imprest License
A Special Imprest License is granted to a main contractor for the import of inputs required for the manufacture of goods to be supplied to the specified categories of "Deemed exports" as covered in the EXIM Policy.
DEPB Scheme
Under DEPB Scheme exporters are eligible to claim customs duty credit as a specified percentage of FOB value of exports made in freely convertible currency. The credit shall be available against such exports products and at such rates as specified by the DGFT. So far, credit rates for 93 electronic items have been notified under DEPB Scheme.
The Pass Book would be issued with one year validity period either on post-export basis at single port of registration. The scheme covers both manufacturer and merchant exporters. Any item except those in the negative list shall be allowed for import. Third party exports are also admissible for credit under DEPB Scheme . The DEPB on post-export basis and/or the items imported against it is fully transferable.
Some additional facilities as listed below have been provided for better implementation of the Scheme
- DEPB rates rationalised to account for the changes in Customs duties
- Caps fixed on certain items but there would be no verification of Present Market Value (PMV) on such items.
- A number of ports have been added for availing facilities under the Duty Exemption Scheme, including DEPB.
- The threshold limit of Rs. 200 million for fixing new DEPB rates removed.
Deemed Exports
The Following categories of supply of goods by the main/sub-contractors shall be regarded as 'Deemed Export' under the Export-Import Policy, provided the goods are manufactured in India:
- The Following categories of supply of goods by the main/sub-contractors shall be regarded as 'Deemed Export' under the Export-Import Policy, provided the goods are manufactured in India:
- Supply of goods to EOUs or units located in EPZs, EHTPs, SEZs and STPs;
- Supply of goods to projects financed by the multilateral or bilateral agencies/Funds as notified by the Department of Economic Affairs, Ministry of Finance under international competitive bidding in accordance with the procedures of those Agencies/Funds where the legal agreement provided for tender evaluations without including the custom duty
- Supply of Capital Goods to holders of licences under the Export Promotion Capital Goods (EPCG) Scheme;
- Supply of capital goods, including in unassembled/disassembled condition as well as plants, machinery, tools, dies and such goods which are used for installation purposes till the stage of commercial production and spares to the extent of 10% of the FOR value to fertilizer plants;
- Supply of goods to any project or purpose in respect of which the Ministry of Finance, by a notification, permits the Import of such goods at Zero custom duty coupled with the extension of deemed export benefits to domestic supplies;
- Supply of goods to the power refineries not covered above and coal, hydrocarbon, rail, road, port, civil aviation, bridges and other infrastructure projects provided minimum specific investment is Rs. 1000 million or more;
- Supply of marine freight containers by 100% EOU (Domestic freight containers-manufacturers) provided the said containers are exported out of India within 6 months or such further period as permitted by the Customs;
- Supply to projects funded by UN agencies.
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Wednesday, 07th April 2010
