EXIM BUSINESS Concession and Exemption’s 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.

These schemes are mostly available on those imported products, which will be later on used for manufacturing of goods meant for export. This not only stimulates the industrial growth and development, but also brings the foreign currency during the final export process. The following are some of the important import incentives offered by the Government of India, which significantly reduce the effective tax rates for the import companies:

Preferential Rates

Any type of import incentive under preferential rate is only applicable for the import o goods from certain preferential countries such as Mauritius, Seychelles and Tonga provided certain conditions are satisfied. The certificate of origin is very important in order to avail of the benefits of such concessional rates of duty.

Duty Entitlement Passbook DEPB Scheme

Duty Entitlement Pass Book in short
DEPB is basically an export incentive scheme. The objective of DEPB scheme is to neutralize the incidence of basic custom duty on the import content of the exported products. Notified on 1/4/1997, the DEPB Scheme consisted of (a) Post-export DEPB and (b) Pre-export DEPB. The pre-export DEPB scheme was abolished w.e.f. 1/4/2000. Under the post-export DEPB, which is issued after exports, the exporter is given a duty entitlement Pass Book at a pre-determined credit on the FOB value. The DEPB allows import of any items except the items which are otherwise restricted for imports.

Duty Drawback Rates

Duty Drawback is the special rebate given under the Section 75 of Indian Customs Act on exported products or materials. Duty drawback rates or concession are only applicable on products which are used in the processing of goods manufactured in India and then exported to foreign countries.
Duty Drawback is not given on inputs obtained without payment of customs or excise duty. In case of re-export of goods, it should be done within 2 years from the date of payment of duty when they were imported. 98% of the duty are allowable as a drawback, only after inspection. If the goods imported are used before its re-export, the drawback will be allowed as at reduced per cent.

All industry drawback rates are fixed by Directorate of Drawback, Dept. of Revenue, Ministry of Finance and Government of India and are periodically revised – normally on 1st June every year.Section 37B of Central Excise Act allows the Central Government to frame rules for the purpose of the Act. Under these powers, ‘Customs and Central Excise Duties Drawback Rules, 1995’ have been framed.

Duty Free Replenishment Certificate – (DFRC)

Under the Duty Free Replenishment Certificate (DFRC) schemes, import incentives are given to the exporter for the import of inputs used in the manufacture of goods without payment of basic customs duty. Such inputs shall be subject to the payment of additional customs duty equal to the excise duty at the time of import. Duty Free Replenishment Certificate (DFRC) shall be available for exports only up to 30.04.2006 and from 01.05.2006 this scheme is being replaced by the Duty Free Import Authorization (DFIA).

Duty Free Import Authorization – DFIA

Effective from 1st May, 2006, Duty Free Import Authorization or DFIA in short is issued to allow duty free import of inputs which are used in the manufacture of the export product (making normal allowance for wastage), and fuel, energy, catalyst etc. Which are consumed or utilized in the course of their use to obtain the export product. A Duty Free Import Authorization is issued on the basis of inputs and export items given under Standard Input and Output Norms (SION).

Deemed Exports

Deemed Export is a special type of transaction in which the payment is received before the goods are delivered. The payment can be done in Indian Rupees or in
Foreign Exchange. As the deemed export is also a source of foreign exchange, so the Government of India has been given the benefit duty free import of inputs.

Agri Export Zones – AEZ

Various importers that come under the Agri Export Zones are entitled to all the import facilities and incentives.

Served from India

In order to create a powerful “Served from India” brand all over the world, the government has provided different type of import incentive to the invisible export providers. Under the Served from India Scheme, import incentive is given for import of any capital goods, spares, office equipment and professional equipment.

Manufacture under Bond

Under the Manufacture under the Bond Scheme, all factories registered to produce their goods for export are exempted from import duty and other taxes on inputs used to manufacture such goods. Against this, the manufacturer is allowed to import goods without paying any customs duty. The production is made under the
Supervision of customs or excise authority.

Export Promotion Capital Goods Scheme -EPCG

EPCG is a special type of incentive given to the EPCG license holder. Capital goods imported under

EPCG Scheme is subject to actual user condition and the same cannot be transferred /sold till the fulfillment of export obligation specified in the license. In order to ensure that the capital goods imported under EPCG Scheme, the license holder is required to produce certificate from the jurisdictional Central Excise Authority (CEA) or Chartered Engineer (CE) confirming installation of such capital goods in the declared premises. Under Export Promotion Capital Goods (EPCG) scheme, a license holder can import capital goods such as plant, machinery, equipment, components and spare parts of the machinery at concessional rate of customs duty of 5% and without CVD and special duty.

Advance Customs Clearance Permit

Under the sub-section (1) of section 25 of the Customs Act, 1962 (52 of 1962), the Central Government exempts goods imported into India, against an Advance Customs Clearance Permit issued on or before 31st March, 1995 under Para 58 of the Export and Import Policy 1992-1997. Advance Customs Clearance Permit allows an importer to import raw materials, components, packing and labeling materials, etc. without payment of customs duty in India. The product is then used by the Indian manufacturer to make the final product as required by the foreign buyers on job work basis. After manufacturing the final product is then exported without imposing kind of taxes from the custom department.

Project Imports

Any incentives under the Project Import are given for those imported items needed for setting up an independent project. After the establishment of the project, its final manufactured product is used for the export purpose. Imports scheme is applied to Industrial Plants, Irrigation Projects, Power Projects, Mining Projects, and Projects for Oil or Mineral Exploration. The items eligible for project imports are specified in heading 98.01 of the Customs Tariffs Act, 1975, which mostly include machinery items.

Focus Market Scheme – FMS

The objective of Focus Market Scheme is to offset the high freight cost and other disabilities to select international market with a view to enhance export competitiveness to these countries. The exporter shall be entitled to get credit 2.5% of FOB value of the export made in countries listed in Appendix – 37C.

Focus Product Scheme – FPS

The objective of Focus Product Scheme is to incentives export of such products which have high employment intensity in rural and semi-rural areas so as to offset the inherent infrastructure inefficiencies and other associates costs involved in marketing of these products. The exporter shall be entitled to get credit 1.25% of FOB value of the export made of these products listed in Appendix – 37D.

Monitoring Realization of Export Proceeds in EDI

OFFICE OF THE COMMISSIONER OF CUSTOMS (EXPORT),

JAWAHARLAL NEHRU CUSTOM HOUSE,

NHAVA SHEVA,TAL. URAN, DIST. RAIGAD, MAHARASHTRA – 400 707.

 

F.No.S/12-Gen-1450/07 DBK(JCH) Date : 09.03.09

 

PUBLIC NOTICE NO.11/2009
(Referred/amended Vide P.N. No. 12/2011, 37/2011, 52/2010, 44/2014, 29 /2015)

 

Subject:  Systems Alert for Monitoring Realization of Export Proceeds in EDI – reg.

 

Attention of all the exporters, trade and industry, CHA and all concerned is invited to the Board’s circular No. 5/2009-Cus. dated 2nd February, 2009 vide F.NO.609/167/2003-DBK.

  

2. In terms of the provisions of Section 75 (1) of the Customs Act, 1962 read with sub-rule 16A (1) of the Customs, Central Excise Duties and Service Tax Drawback Rules, 1995, where an amount of drawback has been paid to an exporter but the sale proceeds in respect of such export goods have not been realized within the time allowed under the Foreign Exchange Management Act (FEMA), 1999, such drawback amount is to be recovered. Sub-rule 16A (2) stipulates that if the exporter fails to produce evidence in respect of realization of export proceeds within the period allowed under the FEMA, 1999 or as extended by the Reserve Bank of India (RBI), the Assistant/Deputy Commissioner of Customs shall issue a notice to the exporter for production of evidence of realization of export proceeds, failing which an order shall be passed to recover the amount of drawback paid to the claimant.

 

3. Hitherto, the action to recover drawback was being taken on the basis of Export Outstanding Statement (XOS) received from RBI. The XOS is a consolidated half-yearly Statement giving details of all export Bills outstanding beyond the period prescribed for realization  within   15 days  from  the  close of  the  half  year  i.e.  June / December. However, following the issuance of RBI Circular No. 61 dated 31.1.2004 dispensing  with  submission  of  declarations   for   export   of goods   of   value not exceeding US$ 25,000, it is  observed  that a  large  number of   the   export consignments  presently  fall  outside the purview of  monitoring  mechanism through XOS inasmuch  as the shipment details  of  goods valued upto $ 25,000  are no longer reported  through this statement.

 

4. In view of this change, particularly considering that  under the  statute, the drawback   payment   is ultimately linked to the realization of export proceeds, it has become necessary  for the Department to put  in place  an  in- house monitoring mechanism to monitor  the realization of such proceeds for exports made under the Drawback Scheme. Extensive consultations were held with field formations and trade & industry in this regard, and subsequently, the matter was examined by the Board.  For monitoring the realization  of export proceeds  for drawback purposes, the Board has decided  that the exporters  will submit a  certificate from the authorized dealer (s) or chartered accountant  providing details  of shipment which remain outstanding beyond the prescribed time limit including the extended time,  if any, allowed  by the authorized dealer/RBI on a 6 monthly basis. Such certificate shall be furnished by the exporter, authorised dealer wise for each port.  In order to put the exporters on notice at the time of export itself, an endorsement on the exporter’s copy of shipping bill would be made specifying the due date for realization of export proceeds.

 

5. In the light of decisions taken by the Board, the Directorate General of Systems has developed a BRC ( Bank Realization Certificate) Software for ICES, the salient features of which are the following:-

 

 (a) The exporters filing Shipping Bills (S/Bs) under drawback shall furnish a declaration to the Assistant Commissioner/Deputy Commissioner (Drawback) providing the details of all Authorized Dealers (AD), their codes and addresses through whom they intend to realize the export proceeds. Such a declaration shall be filed at each port of export through which the exporter exports his goods.  In case, there is a new addition of AD, the same is to be intimated to the concerned Custom House at the port of export.

  

(b) The system would generate on all Drawback Shipping Bills, the due date for submission of BRCs.

 

(c) The exporter shall submit a certificate from the Authorized Dealer(s) in respect of whom declaration has been filed containing details of the shipments which remain outstanding beyond the prescribed time limit, including the extended time, if any, allowed by AD/RBI. Such a certificate can also be provided by a Chartered accountant in his capacity as a statutory auditor of the exporter’s account. A proforma for furnishing such negative statement is enclosed as Annexure.  Further, the exporters also have the option of giving a BRC from the concerned authorized dealer(s).

 

(d) Such certificates shall be furnished by the exporters on a 6 monthly basis before the 7th day of January and July in respect of exports which have become due for realization in the previous 6 months. For example, for the six-monthly period of January- June 2008 (during which exports were effected), the statement/BRC needs to be submitted by the 7th July, 2009.

 

 (e)    Such certificates shall be filed by the exporter AD wise at each port. The relevant date for filing certificates shall be the date of let export order (LEO) which is the date when the export goods are in effect permitted to be exported.

 

(f)  The software shall indicate list of the shipping bills under drawback where the BRC/negative statement has not been furnished by the exporter within the prescribed date.  The Assistant Commissioner / Deputy Commissioner (Export) may peruse such lists either for the entire Customs port or for an individual exporter by entering the IE code of the exporter and accordingly initiate action to recover drawback.

 

(g)  The BRC entry module gives three options for entering the details of foreign exchange realization

 

(i)  If the exporter furnishes the BRCs as a proof of foreign exchange realization, the officer will choose option (1) and enter the specific Shipping Bill numbers and dates.  Such Shipping Bills will be deleted by the system from the list of shipping bills pending for realization of export proceeds.

 

 (ii) If the exporter produces a “negative statement” for a specified six monthly period from the AD/chartered accountant that no foreign exchange is pending realization for the exporter in the given period, the officer will choose option (2).  The system will automatically display the S/Bs pertaining to the given period on screen and once the officer approves, all such shipping bills shall be deleted from the pendency list.

 

 (iii)    If the negative statement furnished by the exporter gives the list of S/Bs, for a particular six month period, for which foreign exchange has not been realized (and by implication foreign exchange has been realized for all other S/Bs) then, the officer will choose option (3). This will allow the officer to enter the S/Bs for which the BRCs are pending.  Thereafter, all S/Bs except such pending S/Bs will be deleted from the list.

 

(iv) The BRC entry module also enables the Department to remove the list of S/Bs from the pendency list if drawback is recovered subsequently.  In such cases, the officer may choose option (1) and enter the order no./challan no. and date and also the no. and date of all shipping Bills for which the drawback has been realized.  Thereafter, all such S/Bs will be deleted from the pendency list.

 

6. The Custom House shall create a special cell for management of declarations, amendments thereto, Annexure certificates, registers etc.  The cell shall be responsible for keeping the Declarations and other relevant papers in a proper manner and tracking the remittance of export proceeds.  Further, officers will be specially designated by the Commissioner to verify the BRC/negative statement and to make entries in the BRC module.  Notices will be issued by Customs to recover drawback paid on export consignments in respect of which export proceeds have not been realized

 

7. The system will indicate to the Assistant Commissioner/Deputy Commissioner (Drawback) all cases of Drawback Shipping bills with LEO date falling on or after 1.1.2008 if the BRC/negative statement in the prescribed  Annexure  is not submitted by the exporter within the prescribed period. Further, the exporters are required to furnish the BRCs/negative statement in the prescribed Annexure in respect of all the Drawback Shipping Bills having LEO dates from 1.1.2004 to 31.12.2007 (separately for each six month period) within a period of four months from the date of issue of this circular.

 

8. In addition to the list of pending shipping bills (for which export realization has not been received) indicated by the system, the Commissioners shall also by way of audit, exercise special checks in case of first time exporters, exporters who have taken large amounts of drawback suddenly, sensitive destinations, sensitive products etc. so as to ensure that there is no misuse of the drawback facility.  They shall also exercise random audit checks in respect of other exporters to ensure that all export proceeds are realized. During the course of audit, it may also be confirmed on a random basis whether the certificates given by the AD/CA are genuine or not by on the spot verification. A proper record of all such audit checks and the period of audit should be maintained.

 

9. Difficulties faced, if any, in implementation of the Circular may be brought to the notice of the Commissioner of Customs (Export), JNCH at an early date.

 

 

 

(K. L. GOYAL)
COMMISSIONER OF CUSTOMS (EXPORT)
JNCH, NHAVA SHEVA

 

 

ANNEXURE

Certificate in case provided by the Authorized dealer *.

This is to certify that the export proceeds in respect of export shipments made by

M/s_____________________ during the period ___________ for which the documents

have been processed by us have been received except for the following consignments as per details given below:

1. Name of the exporter :
2. IEC No. :
3. Port of export :
4. Details of exports pending realization :

 

Sl. No.	Shipping bill number and date	Due date for realization	Amount pending realization	Remarks like whether exporter has been granted extension or applied for extension or waiver or any other reasons for non-recovery

 

 

 

Place: Signature and details of Authorized Dealer (AD)

Date: CodeNo.

* Certificates are to be furnished Authorized Dealer-wise for each port separately for the

 

 

ANNEXURE

Certificate in case provided by the Chartered Accountant **.

I/We have audited the accounts of M/s____________________ and on that basis

certify that the export proceeds for export shipments made during the period

__________ to _________ have been received except for the following consignments as

per details given below:

1. Name of the exporter :
2. IEC No. :
3. Port of export :
4. Details of exports pending realization :

 

Sl. No.	Shipping bill number and date	Due date for realization	Amount pending realization	Remarks like whether exporter has been granted extension or applied for extension or waiver or any other reasons for non-recovery

 

 

Place: Signature and details of chartered accountant

Date: CA Registration No.

 

** Certificates are to be furnished for each port separately for the periods January – June/July- December every year

+++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++

Please Contact

FOR AASHIRGURKAR&ASSOCIATES 

ADV.AMOL A SHIRGURKAR

_________________________________________________________________________________

AASHIRGURKAR&ASSOCIATES 

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Green Zone

All lands are basically agricultural land so all lands not falling in any non-agricultural categories are deemed to be agricultural land irrespective of they are used for cultivation or not. Where the area is primarily engaged in agricultural activity the Regional Plan allocates the land of the area for agricultural activity and categories it as the Green Zone.

 

The aim is to protect agricultural activity, preserve area for recreational use and arrest urban sprawl. Although Green Zone is much like Forestzone, lands falling under Green Zone cannot be purely used for agricultural activity alone for number of reasons. For example;

 

1. In every village there are some places which are reserved for village settlement. The place reserved for this purpose is called Gaothan. Population of rural area is ever increasing. To meet the growing requirement of housing and allied activities provisions are made in MLR Code and in the Bombay Village Grampanchayat Act for extension of Gaothan.
2. Agricultural land is required to use for other purposes such as,agro-based industries for processing farm produce.
3. Village needs roads for commuting, a hospital for the health care and schools for education.
4. Although poultry farms, horticultural project, cattle stables, piggeries, sheep farms are agricultural activities, they consume agricultural land for erecting buildings for above production.
5. Due to high value and shortage of large size land in urban area many space extensive activities such as educational, medical, social, cultural religious institutions, film and video shooting sites are not possible in urban areas.

 

Generally the Regional Plans permits below mentioned activities in the Green Zone under some conditions.

 

 

1. a) Gaothan and Gaothan Expansion Schemes.
2. b) Farm buildings as permissible under Section 41 of the Maharashtra Land Revenue

Code, 1966;

1. c) Holidayresorts, holiday homes.
2. d) Single-family houses on plots not less than 2000 sq.m. in area.
3. e)Educational, medical, social, cultural and religious institutions along with residential quarters, and shops for the staff and the primary school, pre-primary school and health centre.
4. f) Film and video shooting sites with studio and other related facilities
5. g)Godowns, container park, open ground storage of non-hazardous and non-obnoxious

nature on the major district roads, state highways, or road having width 15.00 m or more and away from 500 m from Gaothan and National Highway.

1. h)Agricultural and allied activities and agro-based industries, rice mill, poha mill, saw mill, cold storage, horticultural project, poultry farms, cattle stables, piggeries, sheep farms.
2. i)Religious places, crematorium and cemetery;
3. j) Parks, gardens, play fields, golf courses, swimming pools, race courses, shooting ranges, camping grounds, facilities for water sports, amusement parks, theme parks;
4. k) Fish farms, fish drying, storage of boats, servicing and repairs of boats;
5. l)Quarrying of stone, murum or earth including mechanised stone crushing or stone dressing and temporary housing of laborers, office of the supervisors, managers and other accessory buildings related to quarrying activity.’
6. m) Small scale industries and resource based industries and processing plants employing local resources and giving employment to the local population in the rural areas having land requirements of not more than 4000 sq.m subject to not more than 2.0 ha in each village may be freely allowed in villages located 8 km from major industrial department.
7. n) Roads and bridges, railways, heliports, airports, ports, jetties, dams, pipelines, electricity transmission lines, communication towers, rope ways and such other essential services.
8. o) Highway amenities and services such as petrol pump, small shops, service stations including emergency repair services, restaurants, parking lots and police check-post.