FIEO President presents six point charters to Commerce Minister

18 Jul '09

5 min read

7. Rationalization of additional export obligation under EPCG: The additional export obligation is with reference to duty saved which for excisable sector refers to differential between the applicable basic customs duty and 3%. However, for calculation of export obligation, additional customs duty is also added to the duty saved portion which should not be the case as additional customs duty is any case Cenvatable for excisable products.

8. Maintenance of average export obligation: Indian exports were showing a growth of over 20% since 2002-03.However, due to negative growth in world trade, it would be difficult for Indian exporters to maintain such high growth rate so as to adhere to both average and additional export obligation under EPCG scheme. The average export obligation may, therefore, be fixed at 50% of the preceding three years exports particularly for sectors showing negative growth and services sectors such as Hotel and Tourism which are hard hit after 26/11.

9. Alternative window dispensing average export obligation: Many of the companies are not availing EPCG scheme due to high export obligation which they are required to take under the scheme. Such companies may be given the option to meet only the additional obligation prescribed under EPCG scheme (8 times the duty saved excluding additional customs duty). However, the capital goods allowed should be with actual user condition even after completion of additional export obligation.

10. Spares for domestic capital goods under EPCG scheme: At present only the imported capital goods under EPCG scheme are provided import of spares under the scheme. Many a times, exporting units is using domestically procured capital goods for which they want imported spares. EPCG scheme should allow such spares against a lesser export obligation of four times the duty saved.

11. Duty free fuel for exports under DEPB/drawback schemes: While Foreign Trade Policy provides for duty free fuel for units having captive power plants and operating under Advance Authorisation. However, the same benefit is not available to such units while exporting through drawback and DEPB schemes. Fuel cost is one of the important components and therefore, the same should be allowed at near the international price to all exporting units either having captive power plants or using generators for export production.

12. Additional markets under focus market scheme: All countries falling under Focus Africa, Focus LAC and Focus CIS together with US and Europe may be made eligible for the benefit of Focus Market Scheme.

13. Additional products under Focus Product Scheme: Rayon Tyre Yarn/Cord, Rayon Tyre Grey, Dipped Fabric, Made-ups items, Home Textiles, Silk Products, Petroleum Products, Electric Cable, etc. may also be included under Focus Product Scheme (FPS) to facilitate export growth in these sectors.

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