Exporters can choose 0% EPCG or SHIS, if incorrectly issued: DGFT

The Dollar Business Bureau

DGFT has decided that exporters who have been incorrectly issued or availed simultaneous benefit of Status Holder Incentive Scheme (SHIS) and Zero Duty EPCG Authorization under Foreign Trade Policy 2009-14, shall be allowed flexibility to choose one of the two schemes.

“The DGFT (Directorate General of Foreign Trade) had received references from Directorate of Revenue Intelligence and various exporters, on the subject of incorrectly issued simultaneous benefits of Status Holder Incentive Scheme (SHIS) and Zero Duty EPCG Authorization under Foreign Trade Policy 2009-14. The representations have been examined by this Directorate in consultation with Department of Revenue and it has been decided that exporters who have been issued or availed such simultaneous benefit of these schemes shall be allowed flexibility to choose one of the two schemes,” the DGFT said in a notification.

In case of return of SHIS (including splits), the unutilised SHIS (part or whole) may be surrendered by the original holder to whom such SHIS was issued by surrender of the original SHIS scrip, said the notification.

The amount of SHIS that has been transferred by original applicant shall be treated as amount of SHIS utilised and treated accordingly, including for purpose of refund and interest payment by original applicant, it added.

When zero duty EPCG (i.e. all relevant authorizations) has to be returned, the amount equivalent to the duty forgone shall be refunded in cash with interest at the rate prescribed.

Further, instead of return of zero duty EPCG (i.e. return of all the relevant authorizations), the exporter may opt to convert zero duty EPCGs issued till April 17, 2013 to 3 percent EPCGs by paying the differential duties plus applicable interest, the notification stated.

DGFT said that the amount shall be paid back to Government in cash. The facility of debiting the amount in valid freely transferable duty credit scrip issued under Foreign Trade Policy or in valid SHIS scrip held by the original holder to whom it was issued, shall be allowed for paying the refund part.

However, interest part shall be always paid in cash, it added.

DGFT has set a time frame of 9 months from provision of option for the process.

In cases of incorrect issuance of SHIS/Zero Duty EPCG Authorisation will be considered, no penal action shall be taken against the exporters, it added.