Overview on Foreign Trade Policy CA. Hans Raj Chugh

Transcription

1 Overview on Foreign Trade Policy

2 Overview Foreign Trade (Development & Regulation) Act,1992 Foreign Trade Policy Foreign Trade Policy ( ) New Initiatives Question answer session 2

3 Overview 3 3

4 Trade Policy Phases Post Independence Policy Post 1992 Post

5 Import and Export (Control) Act, 1947 Valid for 3 years Extended up to 1977 Indefinite extension up to 1992 Export Import Policy Yearly gazette notification until year Policy year Policy year Policy

6 Repealing of the Import and Export (Control) Act, 1947 Replaced by the Foreign Trade (Development & Regulation) Act, 1992 Export Import Policy 5 year policy co-terminus with 5 year Plan 5 year policy year policy year policy (Extended up to ) 5 year policy

7 Foreign Trade (Development & Regulation) Act,

8 Key Sections: Section-2 Section-5 Section-6 Section-7 Section-8 Definitions Import/ Export Licence/Services Formulation of Foreign Trade Policy Appointment of DG Advise on formulation of Foreign Trade Policy Implementation of Policy Importer-exporter Code Number Suspension and cancellation of Importer-exporter Code Number 8

9 Key Sections: Section-9 Section-10 Section-11 Section-12 Section-13 Section-14 Section-15 Section-16 Issue, suspension and cancellation of licence Power relating to search and seizure Contravention of provisions of this Act, rules, orders and export and import policy penalty of not less than ten thousand rupees and not more than five times the value of the goods or services or technology in respect of which any contravention is made or attempted to be made, whichever is more. Penalty or confiscation not to interfere with other punishments Adjudicating Authority Giving of opportunity to the owner of the goods, etc. Appeal Revision 9

10 Key Sections: Section-17 Section-18 Section-19 Section-20 Power of Adjudicating and other Authorities Protection of action taken in good faith Power to make rules Repeal and savings 10

11 Licensing Authority for import or Export of goods Designation of the Officers The Additional Director General of Foreign Trade The Export Commissioner The territorial areas in respect of which the jurisdiction is to be exercised Through out India Through out India The Joint Director General of Foreign Trade HO Through out India Deputy Director General of Foreign Trade HO Through out India Assistance Director General of Foreign Trade HO Through out India The Controller of Imports and Exports HO Through out India RA RA RA RA Respective territorial jurisdiction of such Authority Respective territorial jurisdiction of such Authority Respective territorial jurisdiction of such Authority Respective territorial jurisdiction of such Authority The Development Commissioner /Joint/Deputy/Assistant Development Commissioners of free Trade Zone or an Export processing Zone. Respective territorial jurisdiction of such Authority 11

12 Appellate Authority under Foreign Trade Regulations Designation of Adjudicating Authority Assistant Director General of Foreign Trade Deputy Director General of Foreign Trade Appellate Authority Additional Director General of Foreign Trade Joint Director General of Foreign Trade Additional Director General of Foreign Trade Development commissioner, Special Economic Zones Director General of Foreign Trade aided by one Addl.DGFT in the Director General of Foreign Trade. Designated Officer, Department of Electronics &information Technology 12

13 Foreign Trade Policy

14 Foreign Trade Policy Goals and objectives: New five year Foreign Trade Policy announced on with aims to increase India s exports of merchandise and services from USD billion in to approximately USD 900 billion by and raise India s share in global trade over the five-year period of to 3.5 per cent from the 2 per cent at present. The vision of the Govt.underpinning the FTP is very clear to make India a significant participant in the world trade by the year 2020 and to enable the country to assume a position of leadership in the International Trade. 14

15 Foreign Trade Policy objectives: (i) To provide a stable and sustainable policy environment for foreign trade in merchandise and services. (ii)to link rules,procedures and incentives for exports and import with other initiatives such as make in India Digital India and skills India to create an Export Promotion Mission for India. (iii) To promote the diversification of India s export basket by helping various sector of the India economy to gain global competitiveness with a view to promoting exports. 15

16 Foreign Trade Policy objectives: (iv) To create an architecture for India s global trade engagement with a view to expanding its markets and better integrating with major region,thereby increasing the demand for India s products and contributing to the government flagship Make in India initiative. (v) To provide a mechanism for regular Appraisal in order to rationalize imports and reduce the trade imbalance. 16

17 INDIAN ECONOMY SNAPSHOT PARAMETER FY 2010 FY2013 FY2014 FY2015 FY 2016 GDP ( at current Prices, US$ bn) Real GDP Growth (%) ** 6.9** 7.2** 7.6# ** Exports -Merchandise (US$ bn) Imports-Merchandise(US$ bn) Exports Services (US$ bn) Software Exports (US$ bn) Imports Services (US$ bn) Current Account Balances (US$ bn) Source:IIF,MOCI,EXIM BANK,RBI **-data as per the revised base year #-Budget estimates. 17

18 Foreign Trade Policy Components and schemes 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 :- Oriented Units (EOUS), Electronics Hardware Technology Parks (EHTPS), Software Technology Parks (STPS) and Bio-Technology parks. Chapter 7 :- Deemed Exports Chapter 8 :- Quality Complaints And Disputes Chapter 9 :- Definitions 18

19 Foreign Trade Policy Chapter 1 Legal Framework & Trade Facilitation The Foreign Trade Policy , notified by Central Government vide Notification No.01/ dated 1 st April 2015, in exercise of powers conferred under Section 5 of the Foreign Trade (Development & Regulation) Act, 1992 to be known as FTP Incorporating provisions relating to export and import of goods and services shall come into force w.e.f and shall remain in force up to 31st March, Documents Published with the FTP:- Minister's Speech Foreign Trade Policy Hand Book of Procedures Foreign Trade Policy Statement. ITC(HS) Classification of Export &Import Items High light of the Foreign Trade Policy. 19

20 Foreign Trade Policy Import / Export Controls Chapter 2:Import / Exports controls Export and imports- Free unless regulated by way of prohibition, restriction, or exclusive Trading through State Trading Enterprises. Import: Presently: Prohibited items - 52 Lines Restricted items Lines State Trading Items - 22 Lines Export: Presently: Prohibited items - 59 Lines Restricted items Lines State Trading Items - 12 Lines (Further, there are some items which are free for import/export, but subject to conditions stipulated in other Acts or in law for the time being in force.) 20

21 Foreign Trade Policy Import / Export Controls Chapter 2:Import / Exports controls Compliance of imports with domestic laws. No import export without IEC (only one IEC against one permannet account number) Mandatory documents for export/ import of goods from/in to India. For exports of goods from India:- 1. Bill of Lading/Airway Bill 2. Commercial invoice and packing list. 3. Shipping bill /bill of exports. For Imports of goods from India:- 1. Bill of Lading/Airway Bill 2. Commercial invoice and packing list. 3. bill of Entry. 21

22 Foreign Trade Policy Chapter 2:Import / Export Controls Exemption from Policy and procedures. DGFT ( after consulting the Committees ) may in public interest pass such orders or grant such exemption, relaxation or relief, as he may deem fit and proper, on grounds of genuine hardship and adverse impact on trade to any person or class or category of persons from any provision of FTP or any procedure. Sl.no. Description Committee a. Fixation / modification Norms committee b. Nexus with capital goods (CG) and benefit under EPCG Scheme EPCG committee c. All other issues Policy relaxation Committee (PRC) 22

23 Chapter 3 Schemes Sl.no Old schemes under FTP New Schemes under ASIDS Deleted 2. Market Access Initiative(MAI) Deleted 3. Marketing Development Assistance (MDA) Deleted 4. Status Holder Incentive Scheme (SHIS) Deleted 5. Vishesh Krishi and Gram Udyog Yojana (VKGUY) Agri. Infrastructure Incentive Scrip(AIIS) 6. Focus Market Scheme (FMS) 7. Focus product Scheme (FPS) Merchandise Export From India Scheme (MEIS) 8 Market Linked Focus Products Scrip (MLFPS) 9. Served From India Scheme(SFIS) Service Exports from India scheme (SEIS) 23

24 Objective Objective of Merchandise Exports from India Scheme (MEIS) -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% or 5% as applicable). (Appendix 3B- listed goods market and rates). 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. 24

25 List of total 293 Countries under Country Group A, Country Group B and Country Group C given below Group A- (Total 34 Countries) (1)Austria, (2) Belgium, (3) Bulgaria, (4) Canada, (5) Croatia, (6) Cyprus, (7) Czech Republic, (8) Denmark, (9) Estonia, (10) Finland, (11) France, (12) Germany, (13) Greece, (14) Hungary, (15) Ireland, (16) Italy, (17) Latvia, (18) Lithuania, (19) Luxembourg, (20) Malta, (21) Netherlands, (22) Poland, (23) Portugal, (24) Romania, (25) Slovak Republic, (26) Slovenia, (27) Spain, (28) Sweden, (29) United Kingdom, (30) United States of America, (31) Iceland, (32) Liechtenstein, (33) Norway, (34) Switzerland 25

26 Group B- Total 140 Countries (1)Algeria, (2) Angola, (3) Antigua, (4) Argentina, (5) Armenia, (6) Azerbaijan, (7) Bahamas, (8) Bahrain, (9) Barbados, (10) Belarus, (11) Belize, (12) Benin, (13) Bermuda, (14) Bolivia, (15) Botswana, (16) British Virgin Islands, (17) Brazil, (18) Brunei, (19) Burkina Faso, (20) Burundi, (21) Central African Republic, (22) Cambodia, (23) Cameroon, (24) Canary Island, (25) Cape Verde Island, (26) Cayman Island, (27) Chad, (28) Chile, (29) China PRP, (30) Colombia, (31) Comoros, (32) Congo Democratic Republic, (33) Congo Republic, (34) Costa Rica, (35) Cote D' Ivoire, (36) Cuba, (37) Djibouti, (38) Dominic Rep, (39) Dominica, (40) Ecuador, (41) Egypt, (42) El Salvador, (43) Equatorial Guinea, (44) Ethiopia, (45) Falkland Island, (46) French Guiana, (47) Gabon, (48) Gambia, (49) Georgia, (50) Ghana, (51) Grenada, (52) Guadeloupe, (53) Guatemala, (54) Guinea, (55) Guinea Bissau, (56) Guyana, (57) Haiti, (58) Honduras, (59) Indonesia, (60) Iran, (61) Iraq, (62) Israel, (63) Jamaica, (64) Japan, (65) Jordan, (66) Kazakhstan, (67) Kenya, (68) Korea Republic (south Korea), (69) Kuwait, (70) Kyrgyzstan, (71) Lao PDR, (72) Lebanon, (73) Lesotho, (74) Liberia, (75) Libya, (76) Madagascar, (77) Malawi, (78) Malaysia, (79) Mali, (80) Martinique, (81) Mauritania, (82) Mauritius, (83) Mexico, (84) Moldova, (85) Montserrat, (86) Morocco, (87) Mozambique, (88) Myanmar, (89) Namibia, (90) Netherland Antilles, (91) Nicaragua, (92) Niger, (93) Nigeria, (94) Oman, (95) Panama Republic, (96) Paraguay, (97) Peru, (98) Philippines, (99) Qatar, (100) Reunion, (101) Russia, (102) Rwanda, (103) Sao Tome, (104) Saudi Arab, (105) Senegal, (106) Seychelles, (107) Sierra Leone, (108) Singapore, (109) Somalia, (110) South Africa, (111) St Helena, (112) St Kitt N A, (113) St Lucia, (114) St Vincent, (115) Sudan, (116) Suriname, (117) Swaziland, (118) Syria, (119) Taiwan, (120) Tajikistan, (121) Tanzania Republic, (122) Thailand, (123) Togo, (124) Trinidad, (125) Tunisia, (126) Turkey, (127) Turkmenistan, (128) Turks and Caicos Islands, (129) United Arab Emirates, (130) Uganda, (131) Ukraine, (132) Uruguay, (133) Uzbekistan, (134) Venezuela, (135) Vietnam Socialist Republic, (136) Virgin Island Us, (137) Yemen Republic, (138) Zambia, (139) Zimbabwe., (140) Hong Kong. 26

27 Group C Total 65 countries (1)Afghanistan, (2) Albania, (3) American Samoa, (4) Andorra, (5) Anguilla, (6) Antarctica, (7) Aruba, (8) Australia, (9) Bangladesh, (10) Bhutan, (11) Bosnia and Herzegovina, (12) Channel Islands, (13) Christmas Islands, (14) Cocos Islands, (15) Cook Islands, (16) Eritrea, (17) Faroe Islands, (18) Fiji Island, (19) French Polynesia, (20) French Southern and Antarctic Lands (Fr S Ant Tr), (21) Gibraltar, (22) Greenland, (23) Guam, (24) Heard Macdonald, (25) Kiribati Rep, (26) Korea DPR (North Korea), (27) Macao, (28) Macedonia, (29) Maldives, (30) Marshall Islands, (31) Micronesia, (32) Monaco, (33) Mongolia, (34) Montenegro, (35) N. Mariana Islands, (36) Nauru Republic, (37) Nepal, (38) Neutral Zone, (39) New Caledonia, (40) New Zealand, (41) Niue Islands, (42) Norfolk Islands, (43) Pacific Islands, (44) Pakistan, (45) Palau, (46) Panama, (47) Papua New Guyana, (48) Pitcairn Islands, (49) Puerto Rico, (50) Saharwi A.Dm Republic, (51) Samoa, (52) San Marino, (53) Serbia, (54) Solomon Island, (55) Sri Lanka DSR, (56) St Pierre, (57) Timor Leste, (58) Tokelau Islands, (59) Tonga, (60) Tuvalu, (61) Serbia (62) Montenegro, (63)Vanuatu Republic, (64) Territory of the Wallis and Futuna Islands (65) Any other country not listed in the Country Groups above will be treated as part of Country Group C 27

28 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 per consignment shall be entitled for rewards under MEIS. -of FOB value more than Rs per consignment then MEIS reward would be limited to FOB value of Rs only. (Such goods can be exported in manual mode through Foreign Post Offices at New Delhi, Mumbai and Chennai. 28

29 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) 29

30 Ineligible categories under MEIS (i) EOUs / EHTPs / BTPs/ STPs who are availing direct tax benefits / exemption. (ii) Supplies made from DTA units to SEZ units (iii) Export of imported goods covered under paragraph 2.46 of FTP; (iv) Exports through trans-shipment, meaning thereby exports that are originating in third country but trans-shipped through India; (v) Deemed Exports; (vi) SEZ/EOU/EHTP/BPT/FTWZ products exported through DTA units; (vii) Items, which are restricted or prohibited for export under Schedule-2 of Export Policy in ITC (HS), unless specifically notified in Appendix 3B. (viii) Service Export. 30

31 Ineligible categories under MEIS ix) Red sanders and beach sand. (x) Export products which are subject to Minimum export price or export duty. (xi) Diamond Gold, Silver, Platinum, other precious metal in any form including plain and studded jewellery and other precious and semi-precious stones. 60 (xii) Ores and concentrates of all types and in all formations. (xiii) Cereals of all types. (xiv) Sugar of all types and all forms. (xv) Crude / petroleum oil and crude / primary and base products of all types and all formulations. (xvi) Export of milk and milk products. (xvii)export of Meat and Meat Products. (xviii)products wherein precious metal/diamond are used or Articles which are studded with precious stones. (xix) Exports made by units in FTWZ. 31

32 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) and Para 9.51(ii) of this policy 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 preceding financial year 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 preceding financial year. 32

33 "Service Provider" means a person providing: "Service Provider" means a person providing: Mode-1 (Cross border trade) Mode -2 (Consumption abroad) Mode-3 (Commercial Presence) Mode 4 (Presence of natural persons) Category Supply of a service from India to any other country; Supply of a service from India to service consumer(s) of any other country; Supply of a service from India through commercial presence in any other country. Supply of a service from India through the presence of natural persons in any other country SEIS Availability Eligible Eligible Not eligible Not eligible 33

34 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. 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. 34

35 Ineligible categories under SFIS : 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; 35

36 Ineligible categories under SFIS : (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 SEZ / 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; (g) Exports of Goods. (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. 36

37 Chapter -3 Service Exports from India Scheme (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% 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 ) 37

38 Chapter -3 Service Exports from India Scheme (SEIS) List of eligible services, rates and conditions for rewards under the Services Exports from India Scheme (SEIS) is notified. (Annexure to Appendix 3D) Note 1:The services and rates of rewards notified against them shall be applicable for services export made between to only. The list of services/rate is subject to review with effect from (further extended up to ) Note 2: The rate of reward for eligible services is subject to conditions as specified in FTP and HBP. Note 3: For Educational Services, SEIS reward shall not be available on Capitation Fee. 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 38

39 Chapter -3 Service Exports from India Scheme (SEIS) LIST OF SERVICES- APPENDIX 3D S. No. SECTORS Central product Classification (CPC) Code 1. BUSINESS SERVICES A Professional services Admissible rate in % (on Net Foreign Exchange earnings) a Legal services 861 5% b Accounting, auditing and bookkeeping services 862 5% c Taxation services 863 5% d Architectural services % e Engineering services % f Integrated engineering services % 39

40 Chapter -3 Service Exports from India Scheme (SEIS) LIST OF SERVICES- APPENDIX 3D. S. No. SECTORS Central product Classification (CPC) Code Admissible rate in % (on Net Foreign Exchange earnings) g Urban planning and landscape architectural services % h Medical and dental services % i Veterinary services 932 5% j Services provided by midwives, nurses, physiotherapists and paramedical personnel % B. Research and development services a R&D services on natural sciences 851 5% 40

41 Chapter -3 Service Exports from India Scheme (SEIS) LIST OF SERVICES- APPENDIX 3D. S. No. SECTORS Central product Classification (CPC) Code b R&D services on social sciences and humanities Admissible rate in % (on Net Foreign Exchange earnings) 852 5% c Interdisciplinary R&D services 853 5% C Rental/Leasing services without operators a Relating to ships % b Relating to aircraft % c Relating to other transport equipment 83101, d Relating to other machinery and equipment 5% % 41

42 Chapter -3 Service Exports from India Scheme (SEIS) LIST OF SERVICES- APPENDIX 3D. S. No. SECTORS Central product Classification (CPC) Code D Other business services Admissible rate in % (on Net Foreign Exchange earnings) a Advertising services 871 3% b Market research and public opinion polling services 864 3% c Management consulting service 865 3% b Services related to management consulting 866 3% e Technical testing and analysis services % f Services incidental to agricultural, hunting and forestry 881 3% g Services incidental to fishing 882 3% 42

43 Chapter -3 Service Exports from India Scheme (SEIS) LIST OF SERVICES- APPENDIX 3D. S. No. SECTORS Central product Classification (CPC) Code Admissible rate in % (on Net Foreign Exchange earnings) h Services incidental to mining 883, % i Services incidental to manufacturing 884, 885 3% j Services incidental to energy distribution 887 3% k Placement and supply services of personnel 872 3% l Investigation and security 873 3% m n Related scientific and technical consulting services Maintenance and repair of equipment (not including maritime vessels, aircraft or other transport equipment) % 633, o Building- cleaning services 874 3% 3% 43

44 Chapter -3 Service Exports from India Scheme (SEIS) LIST OF SERVICES- APPENDIX 3D. S. No. SECTORS Central product Classification (CPC) Code Admissible rate in % (on Net Foreign Exchange earnings) p Photographic services 875 3% q Packaging services 876 3% r Printing, publishing % s Convention services % 2 COMMUNICATION SERVICES a Audiovisual services Motion picture and video tape production and distribution service % b Motion picture projection service % 44

45 Chapter -3 Service Exports from India Scheme (SEIS) LIST OF SERVICES- APPENDIX 3D. S. No. SECTORS Central product Classification (CPC) Code Admissible rate in % (on Net Foreign Exchange earnings) c Radio and television services % d Radio and television transmission services % e Sound recording n. a. 5% 3 CONSTRUCTION AND RELATED ENGINEERING SERVICES Audiovisual services A General Construction work for building 512 5% B General Construction work for Civil Engineering 513 5% 45

46 Chapter -3 Service Exports from India Scheme (SEIS) LIST OF SERVICES- APPENDIX 3D. S. No. SECTORS Central product Classification (CPC) Code Admissible rate in % (on Net Foreign Exchange earnings) C Installation and assembly work 514, 516 5% D Building completion and finishing work 517 5% 4 EDUCATIONAL SERVICES (Please refer *Note 3) A Primary education services 921 5% B Secondary education services 922 5% C Higher education services 923 5% D Adult education 924 5% *Note 3: For Educational Services, SEIS reward shall not be available on Capitation Fee. 46

47 Chapter -3 Service Exports from India Scheme (SEIS) LIST OF SERVICES- APPENDIX 3D. S. No. SECTORS Central product Classification (CPC) Code 5 ENVIRONMENTAL SERVICES Admissible rate in % (on Net Foreign Exchange earnings) A Sewage services % B Refuse disposal services % C Sanitation and similar services % 6 HEALTH-RELATED AND SOCIAL SERVICES A Hospital services % 47

48 Chapter -3 Service Exports from India Scheme (SEIS) LIST OF SERVICES- APPENDIX 3D. S. No. SECTORS Central product Classification (CPC) Code 7 TOURISM AND TRAVEL-RELATED SERVICES A Hotels and Restaurants (including catering) Admissible rate in % (on Net Foreign Exchange earnings) a Hotel % b Restaurants (including catering) % B Travel agencies and tour operators services % C Tourist guides services % 48

49 Chapter -3 Service Exports from India Scheme (SEIS) LIST OF SERVICES- APPENDIX 3D. S. No. SECTORS Central product Classification (CPC) Code 8 RECREATIONAL, CULTURAL AND SPORTING SERVICES (other than audiovisual services) A Entertainment services (including theatre, live bands and circus services) Admissible rate in % (on Net Foreign Exchange earnings) % B News agency services 962 5% C D Libraries, archives, museums and other cultural services Sporting and other recreational services 963 5% 964 5% 49

50 Chapter -3 Service Exports from India Scheme (SEIS). LIST OF SERVICES- APPENDIX 3D S. No. SECTORS Central product Classification (CPC) Code 9 TRANSPORT SERVICES (Please refer *Note 4) A Maritime Transport Services Admissible rate in % (on Net Foreign Exchange earnings) a Passenger transportation* % b Freight transportation* % c Rental of vessels with crew * % d Maintenance and repair of vessels % e Pushing and towing services % f Supporting services for maritime transport 745 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. 50

51 Chapter -3 Service Exports from India Scheme (SEIS) LIST OF SERVICES- APPENDIX 3D. S. No. SECTORS Central product Classification (CPC) Code Admissible rate in % (on Net Foreign Exchange earnings) B Air transport services a Rental of aircraft with crew 734 5% b Maintenance and repair of aircraft % c Airport Operations and ground handling 5% C Road Transport Services a Passenger transportation 7121, % b Freight transportation % c Rental of Commercial vehicles with operator % d Maintenance and repair of road transport equipment 6112, % e Supporting services for road transport services 744 5% 51

52 Chapter -3 Service Exports from India Scheme (SEIS) LIST OF SERVICES- APPENDIX 3D. S. No. SECTORS Central product Classification (CPC) Code Admissible rate in % (on Net Foreign Exchange earnings) D Services Auxiliary To All Modes Of Transport a Cargo-handling services 741 5% b Storage and warehouse services 742 5% c Freight transport agency services 748 5% 52

53 Common Provisions for Exports from India Schemes (MEIS and SEIS) CENVAT/ Drawback Additional Customs duty/excise duty/service Tax paid in cash or through debit under Duty Credit scrip shall be adjusted as CENVAT Credit or Duty Drawback as per DoR rules or notifications. 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. Facility of payment of custom duties in case of E.O. defaults and fee through duty credit scrips. Duty Credit Scrip can be utilized / debited -for payment of Custom Duties in case of EO defaults for Authorizations issued under Chapters 4 and 5 of this Policy. However, penalty / interest shall be required to be paid in cash. -for payment of composition fee under FTP, for payment of application fee under FTP, if any and for payment of value shortfall in EO under Para 4.49 of HBP

54 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 years 54

55 Status Holders: New criteria 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

56 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: 56

57 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 selfcertify 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 (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 10 lakh or 2% of average annual export realization during preceding three licencing years whichever is higher. 57

58 Chapter 4 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 58

59 Duty exemption schemes Advance Authorization Scheme For making available duty free Inputs required to manufacture the export product. Inputs allowed as per Standard Input Output Norms and with Actual User condition. Inputs also allowed on the basis of self declaration. 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. for fulfillment of export obligation18 months from the date of issue of Authorization. 59

60 Duty exemption schemes Advance Authorization Scheme Other Features: Exemption from Basic customs duty Additional customs duty Education cess Anti dumping & safeguard duty and transition product specific safeguard duty. Actual user Inputs cannot be transferred after EO completion 60

61 Duty exemption schemes Other Features: Advance Authorization Scheme Can be availed for annual requirement if Item notified in SION Applicant has exports in last two years Entitlement up to 300% of the FOB value of physical export/for or 1 crore whichever is higher Facility of ARO or Back to Back L/C EO extension 1 st 6 months on 0.5% composition fee 2 nd 6 months on 0.5% per month composition fee No further extension shall be allowed by RA 61

62 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 62

63 Chapter-5 Export Promotion Capital goods (EPCG) Scheme Import of capital goods for pre production,production and post production at zero custom duty. 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 Authorisation. Authorization shall be valid for import for 18 months from the date of issue of Authorisation. Revalidation of EPCG Authorization shall not be permitted. Second hand capital goods shall not be permitted to be imported under EPCG Scheme. 63

64 Export Promotion Capital goods (EPCG) Scheme Authorization under EPCG Scheme shall not be issued for import of any Capital Goods for generation/transmission of power (including Captive plants and Power Generator Sets of any kind) for Export of electrical energy (power) Supply of electrical energy (power) under deemed exports Supply of power (energy) in their own unit, and Supply/export of electricity transmission services Import of items which are restricted for import shall be permitted under EPCG Scheme only after approval from Exim Facilitation Committee (EFC) at DGFT Headquarters. 64

65 Export Promotion Capital goods (EPCG) Scheme 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 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. 65

66 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. 66

67 Chapter-7 DEEMED EXPORTS Deemed Exports Deemed Exports refer to those transactions in which goods supplied do not leave country, and payment for such supplies is received either in Indian rupees or in free foreign exchange. 67

68 DEEMED EXPORTS Deemed Export Benefits for different Kind of the Deemed Exports Supply by Manufacturer Deemed Exports Category (a)supply of goods against Advance Authorization / Advance Authorization for annual requirement / DFIA. (b)supply of goods to EOU / STP / EHTP / BTP; (c) Supply of capital goods against EPCG Authorization (d) Supply of marine freight containers by 100% EOU Advance Authorization / Advance Authorization for annual requirement / DFIA Yes (for intermediate supplies against an invalidation letter) Deemed Export Drawback. Yes (against ARO or Back to Back letter of credit) Refund of terminal excise duty, if exemption is not available. (i) Exemption, in case of Invalidation Letter (ii) Refund, in case of ARO or back to back letter of credit (iii) No exemption/ refund against supply to DFIA as CVD is not exempted Yes Yes Exemption Yes Yes Refund No Yes Refund 68

69 DEEMED EXPORTS Deemed Export Benefits for different Kind of the Deemed Exports Supply by main/sub contractors Deemed Exports Category Advance Authorization / Advance Authorization for annual requirement / DFIA (e) Supply of goods to projects financed by multilateral or bilateral Agencies / Funds as notified by Department of Economic Affairs (DEA) (f)supply of goods to any project permits by MOA to import of goods at zero customs duty (customs notification -12/2012 etc. (g) Supply of capital goods to UN nations or international organizations.. Deemed Export Drawback. Refund of terminal excise duty, if exemption is not available. Yes Yes Exemption Yes Yes Exemption if supply under ICB, refund if tariff based competitive bidding Yes Yes Exemption (h) Supply of goods to nuclear power project Yes Yes Refund 69

70 Chapter 08 Quality Complaints and Trade Dispute In order to resolve complaints or trade disputes and to create confidence in the business environment of the country, a New Chapter Namely Quality Complaints and Trade Dispute has been incorporated in FTP. For Resolving such Dispute at Faster Pace a Committee on Quality Complaints and Trade Dispute is being Constituted in 22 offices and would have members from PCs/FIEOs/APEDAs/EICs. 70

71 Foreign Trade Policy ( ) New Initiatives 71

72 New Initiatives Simplification & Merger of Reward Schemes. Served From India Scheme (SFIS) has been replaced with Service Exports From India Scheme (SEIS) with Transferability and CENVAT Clause. Chapter -3 Incentives (MEIS & SEIS) extended to units located in SEZs. Higher level of rewards under MEIS for export items with high domestic content. Duty Credit Scrip(MEIS & SEIS) of the Chapter-03 now allowed to be used for payment of the excise/customs and Service Tax. 72

73 New Initiatives The nomenclature of Export House certificate has been changed to One, Two, Three, Four, Five Star Export House. The criteria for recognition of status holder have been changed from Rupees to US dollar earnings. Introduction of Approved Export Scheme for Self-certification by Status holder of their manufactured goods as originating from India for preferential treatment under different Trade Agreements. Reduced Export Obligation (EO) for domestic procurement under EPCG scheme. Online filing of documents/ applications and Paperless trade in 24x7 environment. 73

74 New Initiatives Online filing of documents/ applications and Paperless trade in 24x7 environment Trade Facilitation & Ease Of Doing Business. Simplification of Procedures/Process/ Digitization's/ E- Governance - Online procedure to upload digitally signed documents by Chartered Accountant / Company Secretary / Cost Accountant. Dispention of Hardcopies of applications and specified documents. Reduction in period of Record for EPCG from 3 Years two 2 Years. Facility has been created to upload documents in Exporter/Importer Profile. 74

75 New Initiatives Online filing of documents/ applications and Paperless trade in 24x7 environment Online message exchange with CBDT and MCA. EOUs, EHTPs, STPs have been allowed to share infrastructural facilities. EOUs have been allowed facility to set up Warehouses. Facilitating & Encouraging Export of Defence Exports. fast track clearances of import for EOU having Turnover Exceeding Rs.10 Crore. Advance Authorization shall also be eligible for exemption from Transitional Product Specific Safeguard Duty. A Committee on Quality Complaints and Trade Disputes (CQCTD) is being constituted in 22 offices. Vishakhapatnam and Bhimavaram added as Towns of Export Excellence. Single Window Clearance for SCOMET Items/Norms Fixation/Import Authorisation etc. 75

76 Thank You 76