Imports under reward schemes to undergo stringent scrutiny

NEW DELHI: Imports under reward schemes for exports like Served From India will now have to undergo stringent scrutiny. Worried over the rampant misuse of such schemes, the finance ministry is tightening monitoring of imports made under them.

The move follows the department of revenue intelligence’s unearthing of misuse of the Served From India scheme. It was found that hotels were importing certain products, mainly golf carts, restricted under the scheme.

Speaking to ET, an official said the revenue department’s contention was that golf carts would fall under the classification of cars that were not allowed to be imported under the Served From India scheme.

“The revenue department is apprehensive that similar fuzziness in definition could be misused by the industry to import products not allowed under the scheme,” the official said.

Apprehending similar misuse under other reward schemes such as Focus Market Scheme, Focus Product Scheme and Vishesh Krishi Upaj Yojana, the finance ministry wants imports under these also to pass through stringent scrutiny.

Under the Focus Product Scheme, individual service providers who earn foreign exchange of at least Rs 5 lakh and other service providers who earn foreign exchange of at least Rs 10 lakh are eligible for a duty credit entitlement of 10% of total foreign exchange earned by them.

However, in the case of standalone restaurants, the entitlement is 20% whereas in the case of hotels, it is 5%. Hotels and restaurants are allowed to use their duty credit entitlement for import of food items and alcoholic beverages also. However, they don’t have the freedom for items with import restrictions.

The Central Board of Excise & Customs has issued instructions to the field formations that imports under the schemes may be carefully scrutinised to ensure the laid-down provisions are complied with. In particular, it may be ensured the goods restricted for import are not allowed clearance under the schemes, it said.