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 the forthcoming issue of The Dollar Business

We are exporters of fashion accessories. We would like to know what would be the impact on duty drawback once GST is implemented. (Shashank, Business Head, Aloka Exports, +91-93124043XXX, [email protected])

Dear Shashank: With the roll out of the GST, many exporters have the same question and confusion reigns supreme. The Ministry of Commerce has confirmed that duty drawbacks as a remission scheme will continue under the GST regime. The All India Rates (AIR) for duty drawbacks are however likely to undergo changes as GST will subsume various taxes like excise duty. The subsuming of taxes is likely to reduce the input cost and hence change the Standard Input Output Norms (SION), on the basis of which AIR for any product is calculated. In such a scenario, drawback rates could be revised downwards. The Ministry has asked for inputs from export promotion councils and other stakeholders on AIR, and till such time the duty drawback committee publishes a new set of AIRs, the duty drawback rates will not be clear. The Foreign Trade Policy (FTP) 2015-20 is also undergoing a review, and the new FTP is likely to take into consideration the impact of GST on exports. Should you want to know more about the likely impact of GST on exports, you may refer to the cover story published in the June issue of The Dollar Business. (https://in.thedollarbusiness.com/magazine/gst-a-catalyst-or-deterrent-for-indias-exports/46046).

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

I own a registered company and have an IEC. I have decided to venture into gems and jewellery exports. I am based out of Mumbai and can source precious fine jewellery from handmade jewellery manufacturers as well as imitation jewellery from the local vendors. Should I focus on one particular category while venturing into exports? Is it necessary to get RCMC to get export orders? Can’t I generate export business without the membership of the EPC? (Sachin, Owner, Kruttika Enterprises, Mumbai, +91-9969218XXX, [email protected])

Dear Sachin: The decision on whether you want to export fine jewellery or imitation jewellery rests with you. You can venture into any one of the export businesses or both depending on the product knowledge (the sourcing centres, manufacturing processes and quality parameters, etc.) you possess, the capital you can invest in the business and the availability of buyers. It is not mandatory to obtain a RCMC (Registration cum Membership Certificate) or register yourself with an export promotion council to kick off your export business. RCMC is not compulsory as of now. IEC is sufficient to begin exports.

As per the provisions in the Foreign Trade Policy (FTP) 2015-2020, RCMC is required only when you want to avail of any benefit from the government such as duty-free inputs required for production of export-intended products (such as duty-free silver or gold from the nominated agency), duty-free import of capital equipment under the Export Promotion Capital Goods (EPCG) scheme, etc.

In addition, as mentioned in the FTP, membership of Gem and Jewellery Export Promotion Council (GJEPC) is required if you want to take gems and jewellery for participation in the exhibitions abroad or want to display branded gems and jewellery abroad for a period of 180 days. With the help of the membership of the Council, you can apply and obtain an RCMC from GJEPC at no extra cost other than the normal membership fees. We wish you the very best in your venture.

Response by: Sabyasachi Ray,Executive Director,
Gem and Jewellery Export Promotion Council (GJEPC)

 I am involved in international trade of chemicals. I would want to know if it is possible to get export remittance from a third country after a switching of bill of lading? (Farukh Shaikh, +91-9869652XXX, [email protected])

Dear Farukh: The Reserve Bank of India (RBI), considering the evolving international trade practices, has permitted third party payments for export/ import transactions subject to certain conditions. Firstly, a firm irrevocable order backed by a tripartite agreement should be in place. However, an agreement may not be insisted upon in cases where documentary evidence for circumstances leading to third party payments or the name of the third party being mentioned in the irrevocable order/ invoice has been produced subject to the following: The bank should be satisfied with the bona-fides of the transaction and export documents, such as invoice and foreign Inward Remittance Certificate (FIRC) and the bank considers the Foreign Action Task force (FATF) statements while handling such transaction.

Secondly, a third-party payment must be routed through the banking channel only. Third, the exporter should declare the third-party remittance in the Export Declaration Form (EDF) and it would be responsibility of the exporter to realise and repatriate the export proceeds from such third party named in the EDF. Fourth, the reporting of outstanding, if any, in the statement of export outstanding (XOS) beyond six months would continue to be shown against the name of the exporter. However, instead of the name of the overseas buyer from where the proceeds need to be realised, the name of the declared third party should appear in the XOS. And last but not the least, in case of shipments being made to a country in Group II of Restricted Cover Countries (e.g. Sudan, Somalia, etc.), payments for the same may be received from an Open Cover Country. You will be able to get remittance from a third party provided you adhere to above conditions.

Response by: Ajay Sahai,Director General & CEO,
Federation of Indian Exports Organisation (FIEO)

I want to export spices from India, particularly to countries like Bangladesh, United States, China and Sri Lanka. Which countries make for lucrative export destinations? (Dipak, Director, Abhidi Enterprises, +91-9818656XXX, [email protected])

Dear Dipak: We are happy to hear of your decision to foray into exports business. However, we would request greater details of the spices you want to export for us to advice you better. Having said that, let’s assume you want to export turmeric falling under HS Code: 091030. Industry data reveals that India is the world’s biggest exporter of turmeric, accounting for about 70% share in global exports of the product. While India’s biggest export destination for turmeric is US, the country has also been significantly supplying to Iran, UAE, Malaysia, UK, Saudi Arabia, Bangladesh and Sri Lanka, and the exports have been only rising to these countries over the last few years.

More of such pure, researched data is available to members of The Dollar Business CONNECT Programme. (You can read more on TDB CONNECT Programme on https://in.thedollarbusiness.com/connect). Besides detailed Market Access and Potential Identification System (MAPS) report, TDB CONNECT Programme members get access to TDB Eximaps (https://in.thedollarbusiness.com/exim-maps), the most powerful buyer discovery and competition analysis tool for Indian exporters, which ensures you touch newer highs in global trade. In case our assumptions about intended export product isn’t exact, please write to us. The Dollar Business Intelligence Unit would like to hear from you.

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