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: I had applied and successfully got Export House Status for my company in January 2015. As per the new FTP, I suppose the validity is limited up to September 30, 2015. I am planning to submit the application again. But I am not sure if there is a new procedure for online application, or is it still the same old procedure of manual submission of application. Also, please share the benefits granted to One Star Export House under the new FTP. Is the self-authorisation PTA privilege granted to One Star Export House too? (Samapika Sanyal, Jr. Officer - International Operations, Kokuyo Camlin Ltd., [email protected])

Dear Samapika: Status certificates issued under FTP 2009?2014 to an IEC holder are valid till September 30, 2015 or till the issuance of status certificate to such IEC holder under FTP 2015-2020, whichever is earlier. As per the new policy, you are not allowed to manually submit the application. Applicants are now required to file an application online for recognition of status under the Policy in ANF 3C. [However, the facility to file online application has still not been made available on the DGFT website]. Scanned copy of relevant prescribed documents need to be uploaded by the applicant unless prescribed otherwise. Online application for status certificate needs to be filed using digital signature with jurisdictional RA/Development Commissioner (DC) by a Registered Office in case of a Company and by a Head Office in case of others [as indicated in the Hand Book of Procedures].

Under new FTP 2015-2020, a One Star Status Holder is eligible for the following privileges (the detailed para can be accessed on https://in.thedollarbusiness.com/foreign-trade-policy-2015-2020):

(i)Authorisation and Customs Clearances for both imports and exports may be granted on self-declaration basis; (ii) Input-Output norms may be fixed on priority within 60 days by the Norms Committee; (iii) Exemption from furnishing of Bank Guarantee for Schemes under FTP, unless specified otherwise anywhere in FTP or HBP; (iv) Exemption from compulsory negotiation of documents through banks. Remittance / receipts, however, would be received through banking channels; (v) The status holders would be entitled to preferential treatment and priority in handling of their consignments by the concerned agencies; (vi) Status holders shall be entitled to export freely exportable items on free of cost basis for export promotion subject to an annual limit of Rs.10 lakh or 2% of average annual export realization during preceding three licencing years whichever is lower; (vii) Manufacturer exporters who are also Status Holders shall be eligible to self-certify their goods as originating from India as per para 2.108 (d) of Hand Book of Procedures.

However, when it comes to self-certification to qualify for preferential treatment under different preferential trading agreements (PTA), Free Trade Agreements (FTAs), Comprehensive Economic Cooperation Agreements (CECA) and Comprehensive Economic Partnership Agreements (CEPA), only manufacturers who are 3-Star and above status holders have been given the powers to self-certify their manufactured goods (as per their IEM/IL/LOI) as originating from India.

Response by: Steven Philip Warner, President (VMPL) & Editor-in-Chief, The Dollar Business

Q: We are a manufacturer and exporter of chemical products falling under Chapter 29. We also supply to EOUs (which is known as deemed exports). We claim MODVAT credit on inputs. The question is: are we eligible for Deemed Export Drawback? If yes, what will be the rate of Duty Drawback if credit facility has been availed, and also if the credit facility has not been availed? And what is the procedure to apply for the same, if we as a supplier wants to claim it? Consider exporting a product with HS Code 29181990. If drawback is not available along with CENVAT Credit? Or if we get a lower drawback rate? What will be the best option? Currently we are claiming credit and have a large amount of credit that is unused. What should we do? Kindly advise. (Keval Shah, Partner, Keval Exports, [email protected])

Dear Keval: First of all, let’s be clear that there is technically no difference between “Exports” and “Deemed Exports” and both are treated at par when it comes to availing benefits. Supplies to entities like EOUs, STPs, EHTPs, and BTPs against Advance Licence, are considered as “Deemed Exports” (Refer to Para 7.02 of FTP 2015-20 on https://in.thedollarbusiness.com/foreign-trade-policy-2015-2020 for the list of categories to which supply of goods against advance licence by a manufacturer is considered as “Deemed Exports”) and as such the benefits that are available to a regular exporter are also available to a supplier who is supplying to one of the aforesaid entities. Therefore, “Deemed Export Drawback” in nothing but regular “Export Drawback” available to an exporter and can be availed in the same manner as regular drawback.

Now coming back to your question whether you are eligible for “Deemed Export Drawback”, we would say you are not. As per the new FTP 2015-2020, if CENVAT credit/rebate has been availed by the supplier of goods, on inputs/input services, then, no Drawback shall be admissible as per Column ‘B’ of All Industry Rate of Duty Drawback Schedule. However, in such cases, Basic Customs Duty paid can be claimed as Brand Rate of Duty Drawback based upon submission of documents evidencing actual payment of duties. (Refer to Para 7.06 (b) of FTP 2015-20 on https://in.thedollarbusiness.com/foreign-trade-policy-2015-2020). So, in your case, you can approach your Regional Central Excise Authorities and request for the fixation of Brand Rate for your product. However, in case CENVAT credit / rebate has not been availed on the inputs / input services, by the supplier of goods, then, benefit as per Column ‘A’ of All Industry Rate of Duty Drawback Schedule shall be admissible (Refer to Para 7.06 (a) of FTP 2015-20). Further, there is no drawback available on product falling under HS Code 29181990.

When it comes to credit, lying unused in your books, you are eligible to claim a refund of the same. All you need to do is submit an application for the refund of the central excise at your central excise range.

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

Q: What is India’s Exim Policy regarding import of energy drinks? (Ishu, Student, Daly College, Indore, [email protected])

Dear Ishu: Energy drinks fall under HS Code 22029090 and can be freely imported into India. Although India has no set standards for energy drinks till date, one, however, needs to take a no objection certificate (NOC) from the Food Safety and Standards Authority of India (FSSAI) as the agency has been authorised by the Ministry of Health & Family Welfare, Government of India, to lay down standards for articles of food and regulate their manufacturing, storage, distribution, sale and import to ensure availability of safe and wholesome food for human consumption in the country. A manufacturer/importer of energy drink needs to follow the norms, both in terms of labelling and content (caffeine, etc.), set by FSSAI if he/she wants to sell the product in India.

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

Q: We are a star export house. Is it possible to negotiate our bills with the bank under PCFC or FBP if the original copies of the Bill of Lading, Invoice and Packing List have been sent directly to the consignee? However, we can submit the original copies of GR/SDF forms and the photocopies of the aforesaid documents at the time of negotiation? (Kiran Rochlaney, Director, Ramka Silk House Pvt. Ltd., [email protected])

Dear Kiran: Yes, you can. However, allowing direct negotiations of documents is to the discretion of the bank. Banks usually extend this facility to exporters who are their regular customer with a good track record, or are status holders etc. Since you are a star export house, you should be allowed to negotiate your bills.

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