Annual Supplement to India’s present five year Foreign Trade Policy 2009-14, for facilitating and regulating exports and imports, has been announced today (18-4-2013). Though no new scheme has been announced, to boost exports, schemes currently operational have been amended to provide for more relaxations and benefits to importers who are also exporters. Notifications operationalising the changes have also been issued by Ministry of Finance.
EPCG scheme
Two schemes - zero duty EPCG and 3% EPCG have been harmonized into one scheme with export obligation of 6 times the duty saved amount to be completed in 6 years. EO under this new variant cannot be discharged by export of alternate product or from exports by group companies. Further, import of motor cars, SUVs, etc. by hotels, travel agents, etc. would not be allowed under this scheme.Such imports have been made available under amended SFIS scheme. There would also be reduced EO in case of domestic procurement of capital goods and in case of units in Jammu and Kashmir. Import of second-hand capital goods will not be allowed under the EPCG Scheme as per the changes.
Utilisation of duty credit scrip
All duty credit scrips issued under Chapter 3 of the FTP can be utilized for payment of application fees for obtaining any authorization, payment of composition fees and for payment of value shortfalls in EO. As per the highlights issued by the Ministry of Commerce, scrips under Focus Market Scheme (FMS), Focus Product Scheme (FPS) and Vishesh Krishi Gram Udyog Yojana (VKGUY) can also be utilized for payment of Service Tax while procuring services. Notification Nos. 6 to 8/2013-S.T., dated 18-4-2013 have been issued by the Central Board of Excise & Customs in this regard.
Incremental Exports Incentivisation Scheme extended
This scheme, announced only last year, has been extended to cover exports till March 2014. 53 more Latin American and African countries have been added to this scheme.
Served From India Scheme,
Entitlement of SFIS would now be calculated by deducting the foreign exchange spent from the foreign exchange earned during the financial year. These scrips can now also be used for importing/procuring capital goods for the manufacturing business of the service provider subject to actual user condition.
Other changes
Agri Infrastructure Incentive Scheme (AIIS) is now transferable though partially. Status Holder Incentive Scheme (SHIS) has been withdrawn for the year 2013-14 while exemption from Anti-dumping duty and Safeguard duty under DFIA scheme would now not be available after endorsement of transferability of the said authorization. Further, utilization of recredited SAD has been allowed till 30-9-2013. This year's supplement also promises incentives to export of hi-tech products by June 2013.