 Policy >> Foreign Trade Policy Highlights
The Annual Supplement of the Foreign Trade Policy was announced by the Minister of Commerce & Industry, Shri. Kamal Nath, on 19th April 2007. The Policy is progressive and encourages exports. |
Foreign Trade Policy 2004-09
Annual Supplement 2007-08
The Annual Supplement of the Foreign Trade Policy was announced by the Minister of Commerce & Industry, Shri. Kamal Nath, on 19th April 2007. The Policy is progressive and encourages exports. It includes a special scheme for promotion of exports of hi-tech products which may be beneficial for some segments of electronics hardware. Salient Features of the new Policy are:
SAMPLES FOR ALL EXPORTERS
Duty free import of samples up to Rs. 75,000/- (Presently Rs. 60,000/) would be allowed for all exporters.
SERVICE TAX ON EXPORTS
Exemption from Service Tax on services (related to exports) rendered abroad
Government has after all agreed to the principle that we should only export goods and not the taxes and duties thereon. In line with this, services rendered abroad and charged on exports from India would be exempted from Service Tax.
Exemption / Remission of Service Tax on export of goodsService tax on services rendered in India and utilized by exporters would be exempted / remitted. Remission mechanism would be institutionalized after working out modalities with Department of Revenue (DoR).
STATUS HOLDERS
Categorization of exporters as One to Five Star Export Houses has been changed to Export Houses & Trading Houses, with rationalization and change in export performance parameters.
FOCUS MARKET & PRODUCT SCHEMES
Expansion of Ceiling, Scope and Coverage
Under Focus Market Scheme (FMS) and Focus Product Scheme (FPS) coverage / scope of eligible markets / items would be enhanced. Revised allocation for benefits is now Rs.1000 Cr, for exports during 2007-08.
New Markets and Products
16 countries (including 10 from CIS block) are added as new Markets and several value-added low volume export products have been identified and would be entitled to benefits under FPS.
FMS & FPS extended to EOUs
Moreover, EOUs not availing direct tax benefits would also get benefits under FMS and FPS. For full details on Focut Market & Product Schemes, please see http://www.dgftcom.nic.in Foreign Trade Policy 2007-08 (Section 3.9 and 3.10).
PROMOTION OF HIGH TECH PRODUCTS
Promotion of High Tech Products is essential to increase quantum of such products' manufacturing base in India for export purposes. An Export Promotion Scheme is launched with following salient features:-
- Duty credit of 10% on incremental export growth would be given as incentive for exporter.
- List of products would be notified in consultation with concerned Ministries.
DUTY ENTITLEMENT PASS BOOK (DEPB) SCHEME
Extension of DEPB Scheme
DEPB Scheme stands extended upto 31.3.2008. It is proposed to introduce a new scheme instead of DEPB soon.
Modification in DEPB scheme
While extending the scheme for another year, government has agreed to reimburse the cost of duty on fuel and special additional duty, on all export related imported goods, to the extent it is not cenvatable. Benefit may be allowed by notifying Brand rate of DEPB for such products.
HIGHER EXPORT GROWTH THROUGH RATIONALIZATION OF EXPORT PROMOTION CAPITAL GOODS (EPCG) SCHEME
Export Obligation (EO) for tiny and cottage sector
For tiny and cottage, sector export obligation period is raised to 12 years.
Spares, tools and spare refractory for Imported CG
Issue of EPCG for import of spares, tools and spare refractory would be allowed for existing imported plant and machinery (though not imported under EPCG cover).
Waiver of EO due to Force Majeure
Waiver of outstanding export obligations can only be considered where, because of force majeure or other unforeseen circumstances / reasons, exporter is unable to fulfill export obligation.
Concurrent EPCG - Fixation of Average EO
Wherever more than one EPCG authorizations are issued concurrently, fresh EPCG authorization would build upon last required average export obligation only (incorporating the previous EPCG obligation), notwithstanding actual achievements. This removes anomaly whereby better performance is penalized presently.
Block wise EO abolished
Block-wise fulfillment of export obligation would be done away with. This will reduce unnecessary transaction cost and paper work. While doing so in case of existing export obligations fresh EPCG would be issued only to such applicant who has fulfilled proportionate export obligation by that time. Simultaneously, services sector will have to maintain the average to avail new EPCG. This would be a supportive measure for export promotion and growth.
100% EOU AND SEZ UNITS
Interest on delayed payments
Interest on delayed payments (refund of terminal excise duty / duty drawback on deemed exports and CST) would be payable in lines of provisions in Customs and Income Tax Acts. This facility would also apply to delayed payments for deemed exports.
Counting for NFE of EOU
Supplies of accessories such as buttons and hangers by EOUs to DTA units will be counted for NFE calculations.
Defining manufacture under Income Tax
Definition of manufacturing shall be incorporated in Income Tax Act. This would remove uncertainty regarding taxation for EOU units.
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