Special Package for Export Sector

A special package of Rs 325 crore for the employment-intensive leather and textiles export sector, fast settlement of duty credit scrips for duty paid in export production and extension of such scrips for import of even restricted items after payment of duty are the key features of the trade facilitation measures the UPA Government unveiled on Thursday.

The procedural simplifications would help prune high transaction costs to trade and industry.

Announcing the final stimulus to the slowdown-hit export sector, the Union Commerce and Industry Minister, Mr Kamal Nath, said the special package for the twin sectors would be given for exports to be undertaken from April 1.

The threshold slab for premier trading houses has been reduced to Rs 7,500 crore from the current Rs 10,000 crore. The Director General of Foreign Trade, Mr R.S. Gujral, clarified later that this would help seven to 10 companies by way of relief to boost their exports. He said under the DEPB/duty credit scrip, import of restricted items such as HR coil could be done after payment of duty.

Under the Export Promotion Capital Goods (EPCG) scheme, the obligation for all exporters where the decline of the export of the products was by more than 5 per cent, would be reduced proportionately. This has been done for 2009-10 for exports executed during 2008-09, while the export obligation period against advance authorisations has been extended up to 36 months from the current 24 months.

Electronic message and transfer facilities for advance authorisation and EPCG schemes would be available for shipments from Electronic Data Interchange (EDI) ports from April 1.

For import of precious metals, STCL, Diamond India, MSTC and Gem and Jewellery Export Promotion Council and Star Trading House (only for gem and jewellery sector) have been added to the list of designated agencies. Import restrictions on worked corals have been abolished. Authorised persons of gems and jewellery units in Export-Oriented Units would be allowed personal carriage of gold in primary form up to 10 kg in a financial year, subject to RBI and customs guidelines.

To boost agricultural and rural exports, a re-credit of 4 per cent special additional duty, in case of payment of duty by incentive scheme scrips such as Vishesh Krishi and Gram Udyog Yojana, Focus Product Scheme and Focus Market Scheme would now be allowed.

The Minister said Bhilwara for textiles and Surat for diamonds have been recognised as towns under export excellence so that all the benefits for such clusters of export activity would accrue to them. For advance licence issued prior to April 1, 2002 the requirements of modvat/cenvat certifications would be dispensed with in case of customs notification prescribed for payment of countervailing duty.

While the procedural formalities for claiming duty drawback refund and refund of terminal excise duty for deemed exports have been further simplified, Mr Kamal Nath said that reimbursement of additional excise duty levied on fuel would also be admissible for EOUs. (source : businessline )