Foreign Trade Policy 2015 - 2020 - Salient changes in Schemes of reward or incentive / advance authorization or DFIA / EPCG or post export EPCG
Reward in the form of duty credit shall be issued by the DGFT to service providers of notified services located in India under the Service Exports from India Scheme (SEIS) or to export of notified goods (including from SEZs) to notified markets / countries under the Merchandise Exports from India Scheme (MEIS) of the Policy. The MEIS includes reward on specified items that are transacted using e-commerce platforms when their export is made through foreign post offices/courier terminals at Chennai, Delhi and Mumbai for which procedures to be adopted shall be issued separately by concerned wings of CBEC.
Simplifications from earlier schemes include that both SEIS and MEIS reward duty credits are freely transferable and may be used to debit customs duty on import of any goods (except appendix 3A items), debit service tax on procurement of services or debit central excise duty on domestic procurement of excisable goods (without exception for appendix 3A items); the basic customs duty debited in SEIS/MEIS duty credit may also be allowed as drawback. The notification Nos. 24 & 25/2015-Customs, 20 & 21/2015-Central Excise and 10 & 11/2015- Service Tax all dated 08.04.2015 may be referred in this regard.
The Policy HBP para 3.14 relating to declaration of intent for reward on goods requires the exporter to, for shipping bills filed from 1.6.2015 onwards, mandatorily declare intent for rewards on shipping bill. Till then, the present position of mandatory declaration for certain shipping bills would continue. The changed position shall enable Customs to take more informed decisions.
Policy has now provided for exemption from the transitional product specific safeguard duty of section 8C of CTA 1975. Advance Authorization for Annual Requirement has been restricted to cases of standardised norms (no self-declared norms). Only a post-export transferable DFIA with exemption from basic customs duty is provided for. Fuel cannot be imported under the new DFIA. These aspects are reflected in the notification Nos. 18 to 22/2015-Customs dated 1.4.2015 for Advance Authorization Scheme. Provisions relating to accounting of inputs introduced in the earlier FTP (during 2013 and 2014) which are now reflected in para 4.12 of the Policy have been incorporated.
It may be noted that under the Policy, the import of gold for jewellery sector shall be under Advance Authorisation on pre-import basis with actual user condition. Also, the admissibility of brand rate of drawback shall be as per para 4.15 (Advance Authorisation) and para 4.26 (DFIA) of the Policy.
Keeping in view that an Advance Authorization is issued for a resultant product with specified inputs a change is reflected in Notification No. 18/2015-Customs dated 1.4.2015 which is expected to facilitate exporters who rely simultaneously on imported materials and domestic materials, especially those in the exempted goods sectors. The change allows the resultant products to be made by availing facility of rule 18 (rebate of duty paid on materials used) or rule 19{2}(removal of material without payment of duty for use in manufacture of goods exported} of Central Excise Rules subject to the condition that duty free material imported is used for manufacture of dutiable goods.
To further provide impetus to domestic production, the Policy has increased the lowered export obligation (when capital goods are sourced indigenously) from 10% to 25%. This is implemented by the Regional Authorities.
The EPCG authorisation for annual requirement, the provisions for technological up-gradation and for transfer of EPCG capital goods to group companies in certain cases/sectors are discontinued.
Amongst the significant simplifications under the Policy, the export obligation for spares for imported/domestically sourced capital good has been rationalized as that for capital goods. Installation Certificates (ICs) for capital goods have been permitted to be from jurisdictional Central Excise or independent Chartered Engineer. In the latter case, a registered unit would send copy to the jurisdictional Central Excise office. Capital goods may be installed at supporting manufacturer's premises if prior to such installation the latter's details are endorsed on the authorization by Regional Authority, who shall also, as per para 5.02 of Policy intimate the change to jurisdictional Central Excise offices and the Customs where authorisation is registered. Extension of period for producing IC by Regional Authority would be dovetailed by the Customs. Certa title?
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