IGNOU : M.COM : IBO 4 : UNIT 1 : Q - 3. Describe the general provisions for exports and imports.

 

Ans. GENERAL PROVISIONS REGARDING EXPORTS AND IMPORTS

Exports

You have learnt the general provisions regarding exports and imports. Let us now learn the provisions of exports in detail.

Free Exports: All goods may be exported without any restriction except to the extent such exports are regulated by ITC (HS) or any other provision of this policy or any other law for the time being in force.

Denomination of Export Contracts: All export contracts and invoices shall be denominated in freely convertible currency and export proceeds shall be realized in freely convertible currency, Contracts for which payments are received through the Asian Clearing Union (ACU) shall be denominated in ACU dollar.

Realization of Export Proceeds: If an exporter fails to realize the export proceeds within the time specified by the Reserve Bank of India he shall be liable to action in accordance with the provisions of the Act and the policy.

Export of Gifts: Goods including edible items of value not exceeding rupees one lakh in a licensing year may be exported as a gift. Those items mentioned as restricted for exports in ITC(HS) shall not be exported as gift without a license except edible items.

Export of Spares: Warranty spares, whether indigenous or imported, of plant, equipment, ' machinery, automobiles or any other goods may be exported upto7.5% of the FOB value of the exports of such goods along with the main equipment or subsequently. This shall be done within the contracted warranty period of such goods.

Export of Passenger Baggage : Bonafide personal baggage may be exported either along with the passenger or if unaccompanied, within one year before or after the passenger's departure from India. Those items mentioned as Restricted in ITC (HS) shall require a license except in case of edible items.

Private Bonded Warehouse : Private bonded warehouse exclusively for exports may be set up in Domestic Tariff Area as per the norms and conditions of the notifications issued by Department of Revenue, such warehouse shall be entitled to procure the goods from domestic manufacturers without payment of duty, The supplies wade by the domestic supplier to the notified warehouses shall be treated as physical exports provided the payments for the same are made in froe foreign exchange.

Imports

You have learnt the provisions of export in detail. Let us now discuss the provisions of import.

Actual User Condition: Capital goods, raw materials, intermediates, component$, consumables, spares, parts, accessories, instruments and other goods, which are importable without any restriction, may be imported by any person. If such imports require a license, the Actual User alone may import such goods unless exempted.

Second Hand Goods : Ali second hand goods  shall be restricted for imports and may be immortal only in accordance with the provisions of EXIM Policy.

Import of Gifts: Import of gifts shall be permitted where such goods are otherwise fieely importable under this policy.

Import on Export Basis: New or second hand jigs, fixture, dies, moulds, patterns, press tools and lasts, construction machinery, containers packages meant for packing of goods for export and other equipments, may be imported for export without a license on execution of legal under taking hank guarantee with the customs authority.

Re-import of Goads Abroad: Capital good aircraft including their components, spare parts and accessories, whether imported or indigenous may be sent abroad for repairs, testing, quality improvement or up gradation of technology and re-imported without a license.

Import of Machinery and Equipment used in Project Abroad: After completion of the projects abroad, project contractors may import used construction equipment, machinery, related spares upto20% of the CIF value of such machinery, tools and accessories without a license.

Sale on High Seas: Sale of goods on high seas for import into India may be made subject to this policy or any other law for the time being in force.

Import under Lease Financing: Permission of licensing authority is not required for import of new capital goods under lease financing.

Export Promotion Capital Goods Scheme: New Capital goods including computer software systems. may be imported under the Export Promotion Capital Goods (EPCG) scheme. Under this  provision. capital goods including jigs, fixtures. dies, moulds and spares up to 20% of the CIF value of the capital goods may be imported at 5% customs duty.

Duty Exemption/Remission Scheme: 'The duty exemption scheme enables import of inputs required for export production. The duty remission scheme enables post export replenishment/remission of duty on inputs used in the export product. Let us now discuss about them.

1. Duty Exemption Scheme: Under duty exemption scheme, an advance license is issued to allow import of inputs which are physically incorporated in the export product. Advance license is issued for duty free import of inputs as defined in the policy subject to actual user condition. Such licenses are exempted from payment of basic customs duty, surcharge, additional customs duty, anti-dumping duty and safeguard duty, if any. Advance license can be issued for (i) physical exports (ii) intermediate supplies and (iii) deemed exports.

2. Duty Remission Scheme: This scheme consists of duty free replenishment certificate and; duty entitlement passbook scheme. Let us learn them.

Duty Free Replenishment Certificate (DFRC): Duty free replenishment certificate is issued to a merchant-exporter or manufacture exporter fir the import of inputs used in the manufacture of goods without payment of' basic customs duty, surcharge and special additional duty. Such inputs shall be subject to the payment of additional customs duty equal to the excise duty at the time of import.

Duty Entitlement Passbook Scheme: For exporters not desirous of going through the licensing route, an optional facility is given under duty entitlement passbook scheme. The objective of DEPB scheme is to neutralize the incidence of customs duty on the import content of the export product. The neutralization shall be provided by way of grant of duty credit against the export product. Under this scheme, an exporter may apply for, credit as specified percentage of FOB value of exports, made in freely convertible currency.

Importability of Gods by EOU/EPZ/EHTP/STP Unit: Export Oriented Units (EOU), units in Export Processing Zones (EPZs), Special Economic Zones (SEZs), Electronics Hardware Technology Parks (EHTPs) and Software Technology Parks (STPs) unit may import all types of goods without payment of duty. This includes capital goods as defined in the policy, required by it for manufacture, services, trading or in connection therewith. These goods should not be prohibited items.