Institute of Chartered Financial Analysts of India (ICFAI) University 2006 Certification Finance International and Trade – I - university paper

6. Leather & Footwear

Duty free entitlements of import trimmings, embellishments and footwear components for leather industry increased to 3% of FOB value of exports. Duty free import of specified items for leather sector increased to 5% of FOB value of exports. Machinery and equipment for Effluent Treatment Plants for leather industry shall be exempt from Customs Duty.

7. Export Promotion Schemes

a. Target Plus

A new scheme to accelerate growth of exports called Target Plus has been introduced. Exporters who have achieved a quantum growth in exports would be entitled to for duty free credit based on incremental exports substantially higher than the general true export target fixed. Rewards will be granted based on a tiered approach. For incremental growth of over 20%, 25% and 100%, the duty free credits would be 5%, 10% and 15% of FOB value of incremental exports.

b. Vishesh Krishi Upaj Yojana

a different new scheme called Vishesh Krishi Upaj Yojan (Special Agricultural Produce Scheme) has been introduced to boost exports of fruits, vegetables, flowers, minor forest produce and their value added products. Export of these products shall qualify for duty free credit entitlement equivalent to 5% of FOB value of exports. The entitlement is freely transferable and can be used for import of a variety of inputs and goods.

c. Served from India Scheme

To accelerate growth in export of services so as to create a powerful and unique "Served from India" brand instantly recognized and respected the world over; the earlier DFEC scheme for services has been revamped and re-cast into the Served from India scheme. Individual service providers who earn foreign exchange of at lowest Rs.5 lakhs, and other service providers who earn foreign exchange of at lowest Rs.I0 lakhs will be eligible for a duty credit entitlement of 10% of total foreign exchange earned by them. In the case of standalone restaurants, the entitlement shall be 20%, whereas in the case of hotels, it shall be 5%. Hotels and Restaurants can use their duty credit entitlement for import of food items and alcoholic beverages.

d. EPCG

· Additional flexibility for fulfillment of export obligation under EPCG scheme in order to decrease difficulties of exporters of goods and services.

Technological upgradation under EPCG scheme has been facilitated and incentivized.

· Transfer of capital goods to group companies and managed hotels now permitted under EPCG.

In case of movable capital goods in the service sector, the requirement of installation certificate from Central Excise has been done away with.

· Export obligation for specified projects shall be computed based on concessional duty permitted to them. This would improve the viability of such projects.

e. DFRC

Import of fuel under DFRC entitlement shall be allowed to transfer to marketing agencies authorized by the Ministry of Petroleum and Natural Gas.

f. DEPB

The DEPB scheme would be continued until changed by a new scheme to be drawn up in consultation with exporters.

Income tax benefits on plant and machinery shall be extended to DT A units, which convert to EOUs.

Import of capital goods shall be on self-certification basis for EOUs.

For EOUs engaged in Textile & Garments manufacture leftover materials and fabrics up to 2% of ClF value or volume of import shall be allowed to be disposed off on payment of duty on transaction value only.

Minimum investment criteria shall not apply to Brass Hardware and Handmade Jewelry EOUs (this facility already exists for Handicrafts, Agriculture, Floriculture, Aquaculture, Animal Husbandry, IT and Services). .

8. New Status Holder Categorization

· A new rationalized scheme of categorization of status holders as Star Export Houses has been introduced as under:

Category Total performance over 3 years

Star Export Houses shall be eligible for a number of privileges including fast-track clearance procedures, exemption from furnishing of Bank Guarantee, eligibility for consideration under Target Plus Scheme, etc.

9. EOUs

· EOUs shall be exempted from Service Tax in proportion to their exported goods and services.

· EOUs shall be permitted to retain 100% of export earnings in EEFC accounts.

· Income tax benefits on plant and machinery shall be extended to DTA units, which convert to EOUs.

· Import of capital goods shall be on self-certification basis for EOUs.

· For EOUs engaged in Textile and Garments manufacture leftover materials and fabrics up to 2% of CIF value or volume of import shall be allowed to be disposed off on payment of duty on transaction value only.

10. Free Trade and Warehousing Zone

A New scheme to establish Free Trade and Warehousing Zone has beenintroduced to create trade-related infrastructure to facilitate the import and export of goods and services with freedom to carry out trade transactions in free currency. This is aimed at making India into a global trading-hub. Units in the FTWZs would qualify for all other benefits as applicable for SEZ units.

11. Services Export Promotion Council

An exclusive Services Export Promotion Council shall be set up in order to map opportunities for key services in key markets, and develop strategic market access programs, including brand building, in co-ordination with sectoral players and recognized nodal bodies of the services industry.

12. Common Facilities Center

· Government shall promote the establishment of Common Facility Centers for use by home based service providers, particularly in areas like Engineering and Architectural design, Multi-media operations, software developers etc., in State and District-level towns, to draw in a vast multitude of home-based professionals into the services export arena.

13. Procedural Simplification & Rationalization Measures

· Import of second-hand capital goods shall be permitted without any age restrictions.

· Minimum depreciated value for plant and machinery to be re-located into India has been decreased from Rs.50 crores to Rs.25 crores.

All exporters with minimum turnover of Rs.5 crores and good track record shall be exempt from furnishing Bank Guarantee in any of the schemes, so as to decrease their transactional costs.

· All goods and services exported, including those from DT A units, shall be exempt from Service Tax.

· Validity of all licenses/entitlements issued under different schemes has been increased to a uniform 24 months.

· Number of returns and forms to be filed has been decreased. This process shall be continued in consultation with Customs & Excise.

· Enhanced delegation of powers to Zonal and Regional offices of DGFT for speedy and less cumbersome disposal of matters.

Time bound introduction of Electronic Data Interface (EDI) for export transactions. 75% of all export transactions to be on EDI within 6 months.

14. Pragati Maidan ­

In order to show case our industrial and trade prowess to its best advantage and leverage existing facilities, Pragati Maidan will be transformed into a world-class complex. There shall be state-of-the-art, environmentally controJled, visitor friendly exhibition areas and marts. A huge Convention Center to accommodate 10,000 delegates with flexible hall spaces, auditoria and meeting rooms with high-tech equipment, as well as multi-level car parking for 9,000 vehicles will be developed within the envelope of Pragati Maidan.

15. Legal Aid

Financial assistance would be given to deserving exporters, on the

recommendation of Export Promotion Councils, for meeting the costs of legal expenses connected with trade-related matters.

16. Grievance Redressal

A new mechanism for grievance redressal has been formulated and put into place by a Government Resolution to facilitate speedy redressal of grievances of trade and industry.

17. Quality Policy

DGFT shall be a business-driven, transparent, corporate-oriented organization.

Exporters can file digitally signed applications and use Electronic Fund Transfer Mechanism for paying application fees.

All DGFT offices shall be connected via a central server making application processing faster. DGFT HQ has found ISO 9000 certification by standardizing and automating procedures.

18. Board of Trade

The Board of Trade shall be revamped and provided a clear and dynamic role. An eminent person or expert on trade policy shall be nominated as President of the Board of Trade, which shall have a Secretariat and separate Budget

Head, and will be serviced by the Department of commerce.
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Earning:   Approval pending.