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EXPORTS FRAMEWORK POLICY,SCHEMES AND PROCEDURES

EXPORTS FRAMEWORK POLICY,SCHEMES AND PROCEDURES. 9 th November 2010. Taxes and Duties. Central: Basic customs duty, additional Customs duty, special additional duty, education surcharge, service tax ,CST.

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EXPORTS FRAMEWORK POLICY,SCHEMES AND PROCEDURES

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  1. EXPORTS FRAMEWORK POLICY,SCHEMES ANDPROCEDURES 9th November 2010 DG&CEO

  2. Taxes and Duties Central: Basic customs duty, additional Customs duty, special additional duty, education surcharge, service tax ,CST. State: VAT, Electricity duty, Octroi, Mandi Tax, Turnover tax, Purchase tax, Luxary Tax, Entertainment Tax, Entry Tax in lieu of Octroi. Export Duty. GST: CGST,SGST,IGST. DG&CEO

  3. Service Tax Refund 18 services eligible for refund. Details available at www.cbec.gov.in Refund only for service tax paid on specified services Provided no CENVAT benefit has been availed DG&CEO

  4. Procedure Manufacturer exporter to excise having claim over factory Others to excise having jurisdiction over regd./head office Before that STC is alloted to applicant Claim to be filed within 1 year from export from LEO DG&CEO

  5. Procedure(Contd.) No claim less than Rs 500 If claim is upto 0.25% of fob ,document or application to be self certified If claim is more than 0.25% of fob ,document or application to be CA certified DG&CEO

  6. Zero Rebating of Exports No tax or duty on exports.( Export tariff aberration) No Excise duty or VAT on final product. Rebating of service tax on output services Other Central taxes refund through duty refund/exemption schemes. State Tax: Except VAT ,rest are not refunded. DG&CEO

  7. IEC Permanent Code issued by DGFT Application Form Fee of Rs 250 Copy of PAN Copy of bankers Certificate Declarations Exempted Categories DG&CEO

  8. BIN Software generated at Customs Transmission of IEC 15 digit PAN FT 001 and so on DG&CEO

  9. RCMC Issued by Councils/Boards/Authorities Form IEC Membership Fee DG&CEO

  10. Shipping Bill Shipping bill for export of goods under claim for duty drawback/DEPB etc. Shipping Bill for export of dutiable goods. Shipping Bill for export of duty free goods.(Free or White ) Shipping bill for export of duty free goods ex-bond i.e. from bonded warehouse DG&CEO

  11. Bank Certificate of Exports & Realisation Exports documents to be presented to bank within 21 days Advance payment and status holders exempted After negotiation Bank Certificate of exports and subsequent to realisation banks issue BRC Required for claiming various benefits DG&CEO

  12. Examination by Customs Invoice Packing list ARE 1 Rule 18 Rule 19 DG&CEO

  13. ARE 1 Excise document for export clearanceprepared in quintuplicate . Bears running serial number beginning from the first day of the financial year. Original White Duplicate Buff Triplicate Pink Quadruplicate Green Quintuplicate Blue DG&CEO

  14. MATE RECEIPT An acknowledgement of cargo receipt signed by a mate of the vessel. The possessor of the mate's receipt is entitled to the bill of lading, in exchange for that receipt. DG&CEO

  15. BILL OF LADING A  document issued by a carrier  to a shipper, acknowledging that specified goods  have been received on board for delivery to the consignee Evidence of a valid chartering contract and may incorporate the full terms of the contract between the consignor and carrier. DG&CEO

  16. BOL Receipt signed by the carrier confirming goods matching the contract description have been received in good condition A document of transfer, being freely transferable but not negotiable instrument It governs all the legal aspects of physical carriage and like a cheque  or other negotiable instrument may be endorsed DG&CEO

  17. Straight /Order BOL • A straight bill of lading is a non-negotiable document, made out to a specifically named consignee • An Order billof lading is a document that is made out to the order of the foreign importer / its bank/ export firm/ its bank, or another designated party. DG&CEO

  18. FT(D&R) Act • FT(D&R) Act repealed Import and Export (Control) Act, 1947. • FT(D&R )Act, 1992 provide for development and regulation of foreign trade by facilitating imports and augmenting exports . DG&CEO

  19. FOREIGN TRADE POLICY Section 5 of Foreign Trade (Development and Regulation) Act, 1992 empowers the Central Government to notify the Exim (FT) Policy. Para 2.4 of Foreign Trade Policy empowers DGFT to notify procedures DG&CEO

  20. FOREIGN TRADE POLICY 2009-14 Basic objective • To double our global share of merchandise and services exports by 2014. • Provide stability to Policy with continuation of Schemes. • Diversify our product and market base. • Reduce transaction time and cost DG&CEO

  21. Imports/Exports • All Imports/Exports are free except for the items shown as Prohibited/Restricted/State trading enterprises. • Import/Export permitted from/to any destination .Import/export of arms and related material from/to Iraq and North Korea prohibited DG&CEO

  22. Imports/Exports (Contd) • Prohibited goods:- Not allowed except in exceptional cases with approval of Central Government. • Restricted goods: May be allowed under a licence or through a public notice. • STE goods:- May be imported/exported by STE(s) or with a licence from DGFT. DG&CEO

  23. Pre-requisite of Import/Export • Importer-Exporter Code (IEC):- Mandatory except for exempted categories in paragraph 2.8 of Handbook of Procedure Documentation:- Application form with fee . Copy of PAN. Copy of banker’s Certificate Declaration regarding NRI interest DG&CEO

  24. EXPORT PROMOTION SCHEMES • Export Promotion Capital Goods Scheme. • Duty Exemption Scheme. • VKGUY • Focus Product, Focus Market and Market linked Focus Product Scheme • EOU/SEZ Scheme • Status holder Scheme. DG&CEO

  25. Export Promotion Capital Goods Scheme • Import of capital goods at a concessional basic customs duty of 0% for selected sectors and 3% allowed(for all sector) for export purposes. . • Spare ,Jigs ,fixture ,dies and moulds also allowed. • Second hand CG without any age restriction permitted under the Scheme. DG&CEO

  26. Conditions of Exports • Export to be effected equivalent to 8 times (5 times for agro, cottage and tiny sector and 6 times for SSI units)of the duty saved on capital goods . • Exportsto be completed in 8 years/12 years time. • For Zero duty,6 times in six years. • 12 years for duty saved> Rs 100 Cr , and units in agro, cottage and tiny sector. DG&CEO

  27. Conditions of Exports (Contd) • Export of goods capable of being manufactured by use of capital goods. • EO could be discharged by export of goods produced in different manufacturing unit of the company. • Facility to meet 50% of EO by exports of additional items from the same company/group companies permitted. DG&CEO

  28. Duty Exemption/Remission Scheme • Advance Authorisation. • Annual Advance Authorisation • Duty Free Import Authorisation . • Duty Entitlement Pass Book Scheme. • Duty Drawback Scheme DG&CEO

  29. Advance Authorisation • Duty Free import of inputs allowed for exports. • Minimum 15% value addition to be achieved. • Exports/Imports to be completed in 24 months. • Bond / BG / LUT to be given to the Custom Authorities. DG&CEO

  30. Advance Authorisation • Advance License indicates description of export items, quantity of export item, FOB value of exports, description of import items, quantity of import items and CIF value of imports. • Import of inputs exempted from Basic Customs duty, Additional Customs duty and Safeguard/Anti-dumping duty. DG&CEO

  31. Annual Advance Authorisation • Available only to status holders and exporters with 2 years exports. • Entitlement equivalent to 300% of the FOB value or Rs 1 crore ,whichever more in preceding year. • Authorisationvalid for 24 months imp/ exports. DG&CEO

  32. Annual Advance Authorisation (Contd..) • Licence only mentions the export product group, CIF value and FOB value. • Licence holder can export any product falling under the product group including items for which norms do not exist. • Only one licence for one product group or port of registration. DG&CEO

  33. Duty Free Import Authorisation • New Scheme effective from 1st May,2006 • Exporter allowed to import inputs free of Basic Customs and or Additional /SAD duty. • DFIA indicates names and quantity of the raw-material to be allowed duty free. • Minimum value addition of 20% required. DG&CEO

  34. Duty Free Import Authorisation (Contd.) • DFIA and/or material imported under it transferable after completing EO. • Scheme covers only products for which Standard Input Output Norms exist. • Additional Customs duty is refunded through CENVAT or drawback in case of transferabilty. • CENVAT permitted under the scheme. DG&CEO

  35. Duty Entitlement Pass Book Scheme • Substitution Drawback Scheme under ASCM • Aims to neutralize incidence of customs duty on import content of export product, • Exporter entitled for credit at a pre-specified rate of FOB value of exports. • Rates dependent on SION, value addition and Basic Customs duty. DG&CEO

  36. Duty Entitlement Pass Book Scheme (Contd) • Credit can be utilised for import of items otherwise freely importable except capital goods. • For edible oil debit could be only upto 50% from DEPB. • Basic Customs duty, Additional Customs duty debitble from DEPB . • Validity 24 months and upto the last day of the month. DG&CEO

  37. Drawback Scheme • All-Industry : for a product by all companies /firms • Brand Rate :Exclusive to a company/firm for a product AIDBK not available Refunds less than 4/5th of duties DG&CEO

  38. Drawback Scheme(contd) • New Drawback Schedule notified from 17th Sept 2010 • Most drawback rates are specific as against ad-valorem • Drawback Schedule covers now about 1400 products. DG&CEO

  39. VKGUY Objective to promote agriculture, forest produce and their value added forms, Forest produce and Gram Udyog Products Benefit of 5% transferrable duty free credit entitlement for products given in App 37 A . 3%when exporter uses imported inputs under Advance authorisation or claim DEPB/DBK of over 1%. EOUs not availing 10 B benefits also eligible. DG&CEO

  40. Focus Market Scheme To offset high freight cost and other externalities to select international market. Benefit of 3% transferrable duty free credit entitlement for countries given in App 37 C. EOUs/STPs/EHTPs not availing 10 B benefits also eligible. DG&CEO

  41. Focus Product Scheme To incentivise exports with high employment intensity in rural and semi urban areas Benefit of 2% transferrable duty free credit entitlement for products given in App 37 D . EOUs/STPs/EHTPs not availing 10 B benefits also eligible. Special Focus Products under table 2 and 5 to be given 5% DG&CEO

  42. Market Linked Focus Product Scheme Benefit is given on a product country matrix 2% transferable duty free credit entitlement for listed products to specified countries Exclusivity: Only one of the benefit of FMS,FPS,MLFPS or VKGUY can be claimed. DG&CEO

  43. Served From India Scheme Accelerate growth of services exports and create Served from India brand All service providers with foreign exchange earning of Rs 10 lakh and more eligible .Individual with Rs 5 lakh forex earnings also eligible. Entitled for 10 % duty free credit of current year forex earnings. DG&CEO

  44. Served From India Scheme(Contd.) Duty free Credit to be used for imports of capital goods office equipments, spares, professional equipments, office furniture consumables Domestic procurement permitted Not transferrable (except within Group Company and Managed Hotels) DG&CEO

  45. Export Oriented Units • Introduced in early 1981 (Prakash Tandon Committee) to offer duty and control free regime of export production without location binding. • Units for manufacturing and services (no trading permitted) • Only projects having minimum investment of Rs 1 Cr in plant & machinery except specified sectors. DG&CEO

  46. Export Oriented Units (Contd) • Facilities: Import/ Export all goods except prohibited Exemption from IT under section 10B Exemption from industrial licensing for SSI items 100% FDI permitted through Automatic route as applicable to SEZ. DG&CEO

  47. Export Oriented Units (Contd) • 100% of export earnings in EEFC • Export remittance within 12 months. • OBU to extend the credit on same terms as extended to units in SEZ • DTA sale up to 50% of FOB value of exports DG&CEO

  48. Export Oriented Units (Contd) • NFEP to be positive over 5 years. • Supplies to these units deemed exports. • Re-imbursement of CST on goods manufactured. • Remission of Service Tax • Exemption from excise on domestic procurement DG&CEO

  49. Special Economic Zones • Scheme announced in March, 2000. • Foreign territory for taxes and duties • Goods from DTA to SEZ exports, reverse process imports. • Developers of SEZs eligible for tax/duty exemptions DG&CEO

  50. Special Economic Zones(Contd) Facilities for developer: IT exemption as per 80 IA of IT Import/procurement of CG and inputs without customs/excise duty Exemption from CST Exemption from Service Tax DG&CEO

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