In the world of export-import, each shipment counts. And you cannot afford to make any “uninformed investment”. So, if you have any doubt or a question, ask us. Our team of experts at The Dollar Business Intelligence Unit will be happy to answer your queries. Your question(s), if approved, will also be published on www.thedollarbusiness.com, and/or in forthcoming issue of The Dollar Business

Q: Is import of used tyres allowed in India? (Dwarka, Export Import Manager, Sunrise International, [email protected])

Dear Dwarka: Import of retreaded or used pneumatic tyres under ITC (HS) codes 40121100 (retreaded tyres of a kind used on motor cars including station wagons and racing cars), 40121200 (retreaded tyres of a kind used on buses or lorries), 40121300 (retreaded tyres of a kind used on aircraft), 40121910 (retreaded tyres for two wheelers), 40121990 (other retreaded tyres), 40122010 (used pneumatic tyres for buses, lorries and earth moving equipment including bigger size vehicles and light commercial vehicles), 40122020 (used pneumatic tyres for passenger automobile vehicles, including two wheelers, three wheelers and personal type vehicles) is restricted. Import under these HS codes is allowed freely if the consent of / permission from the Ministry of Environment and Forest is taken and the following conditions are met (where applicable): (i) Import of retreaded tyres for buses, lorries and earth moving equipment including bigger size vehicles and light commercial vehicles is permitted freely if the per tyres CIF value is USD175 and above; (ii) Import of retreaded tyres for passenger automobile vehicles including two wheelers, three wheelers and personal type vehicles is permitted freely if the per tyre CIF value is USD25 and above. However, import of used rubber tyres with one cut in bead wire and import of used rubber tubes cut in two pieces is free under ITC (HS) code 40040000.

Response by: Manish K. Pandey, Editor, The Dollar Business

 

Q: I want to know the duty drawback on bamboo sticks if we export them from India. I want to export $30,000 worth of bamboo sticks. Please help me with the duty drawback rate? (Munish Bhandari, Manager, God Grace International, [email protected])

Dear Munish: The All Industry Rate (AIR) of duty drawback on bamboo stick is 1% when the CENVAT facility has not been availed. The drawback rate is 0.15% if the CENVAT facility has been availed.

Response by: Shakti Shankar Patra, Executive Editor, The Dollar Business

 

Q: We are entering into the export business of surgical consumables, instruments and like items. Please suggest what are the taxes applicable on export of these items, i.e. Service Tax, SAD, etc. (Suneel Mundra, Senior Vice President, Shalby Hospitals, [email protected])

Dear Suneel: Taxes like SAD, Service Tax, VAT, etc., are not applicable on a product or service if that product or service is exported from India. Since the sale is not taking place within India, therefore such products or services are not subject to tax within India. Taxes on exported products or service are governed by the laws of the country to which the product or service is being exported. Rule of thumb is – goods and services are exported, not taxes.

Response by: Dr. A. K. Sengupta, Chief Consulting Editor, The Dollar Business

 

Q: We are willing to import coconut in container sized 40ft every week from Paradip port. Can you tell us what the cost of importing it from Paradip to Jabel Ali sea port Dubai will be? (Ranjit, +971564618988, [email protected])

Dear Ranjit: We assume you are interested in knowing the approximate freight and insurance rates for an FCL laden with tender coconut (ITC HS Code 08011910/08011990) from Paradip Port (India) to Port of Jebel Ali (Dubai). Assuming an average weight of 1.5 kg per unit (of coconut), a 40 ft. FCL can be allowed to hold a maximum of 18,667 units (maximum load weight of 28 tonne). Considering an FOB price of Rs.50 per unit (going by recent shipment data), the total FOB value of your shipment will be Rs.933,350, or $14,891 (at an exchange rate of USDINR of 60). Total freight and insurance charges for this volume and value of agricultural product without refrigeration comes to anywhere between $2,529 to $2,749. Allow us to however add that tender coconut (in original form) is mostly shipped by air and in maximum cases, only the processed forms of this agri product (like tender coconut water mix, tender coconut water in tetra packs, etc.) are shipped via ocean. So to export tender coconut in the original form and in a fresh state, air transport is the only solution. The only issue is, via air cargo, the maximum load allowed under ordinary circumstances is 250 kilograms. Our suggestion therefore is – either consider importing tender coconut water mix or tender coconut water in tetra packs instead of the whole, fresh product, or be ready to import the tender coconut at high price points.

Response by: Steven Philip Warner, Editor-in-Chief, The Dollar Business

 

Q: We obtained SHIS License and Zero Duty EPCG License in the same year i.e. 2012-13. When noticed, we paid the Custom Duty with applicable interest against import under EPCG License and surrendered the License to RA. We have also approached Settlement Commission Bench in Mumbai to settle the matter. Still, the concerned RA has issued a show cause notice as to why we should not be penalised. (Indrajit Singh, Senior Manager – Exim, Princeware International Private Limited, [email protected])

Dear Indrajit: In the first place, since you voluntarily opted for payment of Customs Duty with interest against import under EPCG (Export Promotion Capital Goods) license which you surrendered to the regional authority (RA), there was no reason for the show cause notice to be issued. Do mark a copy of your show cause notice to DGFT Headquarters in Delhi. Since your case is a genuine one, we are sure your plea will get the deserved attention and action. We however fail to understand why you approached the Settlement Commision Bench in Mumbai even after paying Customs Duty with interest against import under EPCG license and having surrendered the EPCG license to the regional authority. There is a probability that you have not submitted proof of duty paid to the regional authority. Kindly reply to the show cause notice citing brief facts of the case and enclose your duty payment challans and the notice, and as advised, do mark a copy of all documents with your reply to DGFT Delhi. In your case, we can only conclude that the RA’s show cause notice is a procedural action. Furnishing the documents and clarifying the matter should be the solution.

Response by: Steven Philip Warner, Editor-in-Chief, The Dollar Business

 

Q: I want to know as how to start exports of plywood. How can I quote rates and what are the container sizes used to calculate prices accordingly. How can I work out transportation costs? (Ashok, Associate, Chrishall Agency, [email protected])

Dear Ashok: First, you need to obtain an Importer Exporter Code (IEC) from DGFT. [It is possible to opt for the online application method starting February 1, 2015.] Interested traders can submit applications online to get an IEC instead of physically submitting papers. Click on this link: http://164.100.78.104:8080/dgftiec/IEClogin.jsp. All you will require is some scanned copies of your basic documents and a netbanking account with some (ten, as on February 5, 2015) notified banks. In case you prefer the manual (physical) submission mode or don’t fulfil a certain requirement for e-application, you can opt for the facility of submission of application in manual mode. Containers come in two sizes – 20 ft. and 40 ft. As per the cargo you mention, dry containers of the aforementioned dimensions seem most suitable to serve your need. Ocean freight cost depends on the port of origin and the final port of destination. Obtain a quote from liners. Your clearing house agent will be able to get quotes for you. You will also be required to get a marine insurance of your goods from factory to destination. For exports, always quote the rates in CIF. Carriage (Selling price) + Insurance (Cost of premium) + Freight (Cost of freight).

Response by: Manish K. Pandey, Editor, The Dollar Business