IGNOU : M.COM : IBO 4 : UNIT 1 : Q - 6. Write short notes on: i) Deemed exports ii) Foreign Trade (development and Regulation) Act, 1992 iii) Duty Exemption Scheme iv) Duty Remission Scheme.

 

Ans. Deemed Exports : Deemed Exports refer to those transaction in which the goods supplied do not leave the country, The fallowing categories of supply of goods  by the main/sub-contractors shall be regarded Rs deemed exports under the policy, provided the goods manufactured in India.

i) Supply of goods against advance license /DFRC under the duty exemption remission scheme.

ii) Supply of goods to units located in EOU/EPZ/SEZ/STP/EHTP.

iii) Supply of capital goods to holders of licenses under EPCG scheme.

 iv) Supply of goods to projects financed by multilateral or bilateral agencies funds as notified by the Ministry of Finance.

 v) Supply of capital goods which are used for installation purposes till the stage of commercial production and spares to the extent of 10% of the FOR value to fertilizer plants.

 vi) Supply of goods to any project or purpose in respect of which the Ministry of. Finance permits the import of such goods at zero customs duty coupled with the extension of benefits under this chapter to domestic supplies.

 vii) Supply of goods to the power and refineries and coal hydrocarbons, rail, road, port, civil aviation, bridges other infrastructure projects provided minimum specific investment is Rs. 100 cr’s or more.

 viii) Supply of marine freight containers by 100% EOU (domestic freight containers manufacturers) provided the said containers are exported out of India within 6 months or such further period as permitted by the customs, supply to projects funded by UN agencies.

Foreign Trade (Development and Regulation) Act, 1992

The Foreign Trade (Development and Regulation) Act, 1992 and the Foreign Trade (Regulation) Rules, 1993 and the Foreign Trade (Exemptions from Application of Rules in Certain Cases) order, 1993 issued there under, replaced the earlier legal regime consisting of the Imports and Exports (Control) Act, 1947 and the Import (Control) Order, 1955 and the Export (Control) Order, 1988 issued there under and amended from time to time. With the operation of new legal regime, the era of foreign trade controls witnessed its demise.

The Primary objective of this Act is to provide for the development and regulation of foreign trade by facilitating imports into and augmenting exports from India and for matters connected therewith or incidental thereto. The Export and Import Policy of India is issued under this Act and any amendments to the Policy provisions are also made there under. The permission for export and import is also given under this Act by granting the Importer-Exporter Code Number ([EC). This IEC number has also dispensed with the need of the Code Number for Export (CNX). The maximum punishment for the commitment of any offence, contravention of any law, harming country's trade relations or bringing disrepute to the credit or the goods of the country while conducting the export-import trade transactions, is also operated through the suspension and/or cancellation of the Importer-Exporter Code Number.

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.

The above paragraph discusses the provision of advance license for physical exports. Under the scheme of advance license for intermediate supply, advance license may be issued for intermediate supply to a manufacturer-exporter. This is done for the import of inputs required in the manufacture of goods to be supplied to the ultimate exporter/deemed exporter holding another advance license.

 Under the scheme of advance license for deemed export, advance license can be issued fu- deemed export to the main contractor. This is done for the import of inputs required in the manufacture of goods to be supplied to the categories mentioned in the policy.

 

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

Duty Free Replenishment Certificate (DFRC) : Duty free replenishment certificate is issued to a merchant-export 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. The credit shall be available against sue export products and at such rates as may be specified by Director General of Foreign Trade. The DEPB shall be valid for a period of 12 months from the date of issue. The DEPB and/or the items imported against it are freely transferable. The exports under the DEPB scheme shall not be entitled for drawback. The holder of DEPB shall have the option to pay additional customs duty in cash as well.