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 an SHIS Scrip allowed to be re-transferred if the earlier transferee is unable to use it and provides an undertaking that he hasn’t been able to use it? We have cases of such transfer by DGFT offices of Mumbai and Chennai, but Kolkata office says there is no such provision and has disallowed transfer of SHIS scrips to a 2nd/3rd party, despite us having already submitted a no objection letter from the earlier transferee. Kindly advice? (O.P. Marda, Director, Vivid Visions Trexim Pvt. Ltd., +91-22-42440xxx, [email protected])

Mr. Marda: The Foreign Trade Policy has no limitation imposed on transferability and re-transferability of SHIS scrips amongst Status Holders, provided that the transferee status holder is a manufacturer. Para 3.16.3 of the previous FTP states thus: “The Status Holders Incentive Scrip will be subject to actual user condition. However transferability will be permitted amongst status holders subject to the condition that the transferee status holder is a manufacturer…” Logically therefore, retransfer of SHIS scrip should not be a problem if the condition above is fulfilled. If some RA/DGFT office has stated that there are no provisions for re-transfer, let us also clarify that there are no clauses of prohibition of re-transfer. Imagine a daily scenario. If there are no traffic signals on a certain road, would a commuter be stopped by the traffic police for absence of a signal?!? Or would a commuter wait until a traffic signal is put in place on such a road or go and clarify with the authorities why there is no such stoppage or prohibitory sign on the road? When there are no prohibitory measures, traffic should and should be allowed to flow smoothly. And that is the case with SHIS scrips. If the conditions outlining the transfer are met, there should not be a problem whatsoever. There are however other mandatory documents to be filed, which can be read in the Handbook of Procedures. We hope this information serves you well.

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

Q: I would like to know the import duty on detergent powder for washing machines if imported into India from an ASEAN country. I have come to know that it is about 30%,but I don’t know whether this product falls under Free trade Agreement between India and ASEAN. Please suggest. (Huyen, Director, MDIVIETINDIA TRADE PVT. LTD., +91-9004875xxx, [email protected])

Dear Huyen: We assume you are interested in importing synthetic detergent - washing preparations(including auxiliary washing preparations) and cleaning preparations,having a basis of soap or other organic surface-active agents - falling under ITC HS Code: 34029011. The highest volume and value (as per latest-shipment data) of this product are being imported from Vietnam (as far as an ASEAN country is concerned).The basic custom duty on the said product if imported into India from Vietnam is 5% as the product is a part of the Trade in Goods Agreement with Vietnam under the Framework Agreement on Comprehensive Economic Cooperation between the country and the Association of Southeast Asian Nations (ASEAN).In case our assumption about the intended import product and country 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

Q: We are an importer of polymer falling under Chapter 39. We want to know that once we have paid duty on a consignment and got it cleared from Customs, if we want to export the same cargo anywhere can we get the refund of entire duty? And also do we get any duty drawback advantage? What is the process of such paid duty and drawback?(Sharad Goyal, CEO, Shah Laxminarayan Satishchandra Exim Pvt. Ltd.,+91-9819321xxx, [email protected])

Dear Sharad: Once you have paid the duty on an import consignment and got it cleared from Customs, you cannot ask for duty refund on it if you want to export it to some other country. The process cannot be considered as re-exports. It will be treated as normal exports and the exporter shall be entitled to all the benefits that are available to a regular exporter including duty drawback as per rules. If you want to re-export goods imported from any country without much hassle, we suggest you unload the container(s) from the ship and store it in a bonded warehouse at the port area till the time you actually re-export the goods to the country of your preference. All you will have to do is file a Bill of Entry for Warehousing,also known as Into Bond Bill of Entry. The said bill of entry is filed when the imported goods are not required immediately by the importer for domestic consumption or are required to be re-exported to some other destination. By filing the Into Bond Bill of Entry the consignment can be stored in a warehouse without payment of duty under a bond and cleared later when required for domestic consumption on payment of appropriate duty or can be re-exported directly without paying any duty.The only condition attached to this is that your product should fall under“free to export and import” category.Further, since the goods are not meant for consumption in India, you are not liable to pay customs/import duties. This means that you are also not entitled to any export incentive.

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

Q: I am new to EXIM business. I can begin with an investment of Rs.5lakhs. Can you please tell me what type of product for which country is good for a new exporter like me?(Prabhu P., Proprietor, ecstasy, Madurai,+91-9943655xxx, [email protected] )

Dear Prabhu: We request for a question with either greater details or onethat has a greater focus. For example,we would like to know which products are you considering for exports or which parts of the world would you want to export to. The Dollar Business Intelligence Unit would like to hear from you. Further, if you really want to get into EXIM business,we would say Rs.5 lakhs is a small amount to start with. If you actually want to make some profit from this business, you will need to increase the initial corpus.

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

Q: Does it make sense for a start-up or a small exporter to export guar gum powder from India?(Pravin Jadhav, Sr. Exim Associate, Swavin Business Consultants Pvt. Ltd., +91-9766251xxx, [email protected] )

Dear Pravin: We assume you are interested in exporting guar gum powder falling under ITC HS Code:13023230. Interestingly, India is the largest producer of guar gum in the world and also the biggest player in the exports market. While about two-third of India’s guar gum export scater to oil and gas exploration companies(particularly shale gas exploration companies as the product is used in hydraulic fracturing, a method of extracting shale gas), the rest is consumed by the food processing and personal care industries. Having said that, if we go by the Ministry of Commerce (GoI) data, export of guar gum (treated and pulverised)from India has been continuously falling over the last few years – from$3.2 billion in FY 2012-13 to $1.3 billion in FY 2014-15. The reason is simple. It’s a very volatile commodity to trade in as the demand for it and its prices in the international markets depend on the performance of global oil and gas industry. In fact, a fall in crude oil prices, which has also resulted in dampening the prospects of shale gas industry in countries including US (the biggest importer of guar gum powder), Canada and Russia,has adversely impacted the demand for guar gum across the globe.Considering all this, it would be better if a small exporter or a start-up stays out of this volume-driven trade for the time being.

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