Financial Daily from THE HINDU group of publications
Saturday, Apr 09, 2005
Industry & Economy - Foreign Trade
New trade initiatives unveiled
New Delhi , April 8
BOWING to sustained pressure exerted by the exporters on the issue of taxing the proceeds of the sale/transfer of a specific export promotion scheme, the Union Commerce and Industry Minister, Mr Kamal Nath, today announced that at the behest of the Prime Minister the tax authorities have been directed to keep in abeyance their recovery proceedings .
The Minister said this at the post-launch meeting of the annual supplement to the Foreign Trade Policy (FTP) here amid a sigh of relief from the exporters who were present . He said that the Duty Entitlement Passbook Scheme (DEPB) would continue till the replacement scheme is put in place, even as the Revenue Department has already notified rollover of DEPB till end-September.
Carrying forward the process of trade facilitation, the crux of the annual supplement unveiled today cover efforts to enhance competitiveness of the country's manufacturing sector and employment generation and setting up of inter-State trade council to co-ordinate export efforts of the States. Buoyed by the excellent export performance in the inaugural year of the FTP, the target for the current fiscal has been scaled up from $88 billion to $92 billion.
To ensure the competitiveness of India's agricultural exports, it is proposed to abolish cess on exports of all agricultural and plantation commodities levied under the Commodity Board Act. The benefits under the "Vishesh krishi upaj yojana" scheme announced last year would be extended to poultry and dairy and their value-added products, which would get duty credit at 5 per cent of the free-on-board value of the exports.
For the manufacturing sector, a slew of measures to hone its competitiveness have been announced. Thus, there is no safeguard and anti-dumping duty on inputs under advance licence for deemed export supplies made to international competitive bidding projects. With a view to promoting accelerated export performance, balance export obligation would be waived for the exporters completing 75 per cent of their export obligation in half the prescribed tenure under the Export Promotion Capital Goods (EPCG) scheme. There is also reduced export obligation and enhanced time available for exports under the EPCG scheme for the imports made by the agriculture sector.
A reduced obligation at six times the duty saved amount as against the normal eight times for imports made by the small-scale industrial sector under the EPCG scheme in a bid to upgrade technology and modernisation has been put in place.
To facilitate modernisation of the retail sector, Mr Kamal Nath said that concessional duty benefits under the EPCG scheme would be extended for import of capital goods required by retailers with a minimum covered shopping area of 1,000 sq m. The proposed move, he said, would help India compete with the best retail stores in Malaysia and Singapore.
To overcome the problem of port congestion that contributes substantially to transaction cost to exporters, a new initiative aimed at reducing congestion at major ports has been announced. Thus, the facility of export obligation discharged in rupee payment under the EPCG has been extended to the minor ports, inland container depots and container freight stations.
In a leg-up to marine sector, which has been hit by the recent tsunami tragedy, a special package allowing duty-free import of specified inputs based on the past export performance, import of mono filament long line system for tuna fishing at concessional duty and a self-removal procedure for clearance of perishable waste has been announced.
For the export-oriented units (EOUs), a simplified procedure for units debonding from EOUs has now been put in place and capital goods can be transferred to other units by simply apprising the Central Excise and Development Commissioner. EOUs could also claim income-tax exemption within 12 months from the date of exports.
For the gems and jewellery sector, an enhanced entitlement of Rs 3 lakh of duty-free imports of samples is being allowed and they would also get release of gold of 0.995 and above purity for export purposes from the nominated agencies.
In the services export front, goods imported under the "Served from India" scheme would be transferred within the group companies and managed hotels to enable service providers to upgrade infrastructure in their associate companies. This would allow bulk sourcing and better utilisation of the entitlement.
Annual advance licence, which was available only to status holders, would now be available to all the exporters with some export performance. Bank guarantee threshold has been reduced for units in agri-export zones and established service providers and a category of manufacturer-exporter.
Stories in this Section
The Hindu Group: Home | About Us | Copyright | Archives | Contacts | Subscription
Group Sites: The Hindu | Business Line | The Sportstar | Frontline | The Hindu eBooks | The Hindu Images | Home |
Copyright © 2005, The
Hindu Business Line. Republication or redissemination of the contents of
this screen are expressly prohibited without the written consent of
The Hindu Business Line