Foreign trade policy to get a new look today
The government is planning to simplify the Served From India scheme, a relatively-new export-promotion window.
By Gaurav Malani, TNN |
NEW DELHI: In A move that is expected to boost service exporters, the government is planning to simplify the Served From India scheme, a relatively-new export-promotion window.
A number of institutions like IIT-Delhi and BITS have sought liberalisation of this scheme since the present norms are not conducive for sectors other than the hotels and tourism industry.
These education institutions earn forex through payments made by overseas entities and individuals, they are not able to use the duty-free import entitlement available under the scheme.
Therefore, they want provisions for transferring the entitlement to other parties and earn premium.
More flexibility for the export-promotion window is expected when commerce & industry minister Kamal Nath announces the annual supplement to the Foreign Trade Policy on Friday.
Provisions are being made to include rupee payments by foreign tourists eligible for being calculated as foreign exchange earning under Served From India.
���Many foreigners exchange currency soon after landing here and pay hotels in the Indian currency. Provisions will be made to take such payments also into account, while calculating the forex earning of the service provider concerned,��� senior government officials said.
Hotels are entitled to duty-free import up to the value of 5% of their forex earnings of the previous year under the Served from India scheme, which is meant for service sector exports.
The RBI issued a circular last year that hotels should accept rupee payments from foreign guests and not insist on forex payment. It is felt that the decision would lead to lower forex earnings for hotels in the long run. Hence, the move to calculate rupee payments by foreign tourists as forex earnings.
Service sector companies had also called for doubling the duty-free import entitlement to 10% under Served from India. This plea has been rejected, they said. Due to irregularities detected recently by the Directorate of Revenue Intelligence (DRI), the government is also banning import of cars under this scheme.
Provisions are being made in the FTP to allow duty-free supply of aviation turbine fuel (ATF), to foreign airlines. This would include waiver of all taxes including local levies, officials said.
While the Target Plus scheme has been scrapped, a new window of export promotion is being opened for boosting exports to Africa, CIS countries and Latin America.
This is likely to be a new thrust area for the export promotion along with key products like handlooms, handicrafts, stationary, toys, processed food, fireworks, leather goods, fish and sports goods. The selection of items is on the basis of employment-generation capability, they said.
The DEPB scheme is expected to be valid for the whole of ���06-07 to provide stability to exporters. This is being done in view of the sharp criticism about lack of stability in export-promotion policies.
���How will exporters negotiate their prices if fiscal incentives are changed frequently,��� wondered Delhi Exporters Association (DEA) president SP Agarwal. Denial of Target Plus benefits with retrospective effect was a major blow for exporters of foodgrain, petro products and minerals, he added.
Officials said the duty free replenishment certificate (DFRC) scheme, which helps exporters to import inputs without paying duty is being merged with a couple of other similar schemes.
The new framework for this facility is expected to be in shape of an advance licence, which could be transferred in case the exporter opts for sourcing domestic raw materials. The minimum value addition norm for this scheme is expected to be lower than the 25% fixed under DFRC.
A FRESH FACE
Rupee payments by tourists to be counted as forex earning Simplification of Served from India scheme on cards Foreign airlines to get duty-free fuel.
A number of institutions like IIT-Delhi and BITS have sought liberalisation of this scheme since the present norms are not conducive for sectors other than the hotels and tourism industry.
These education institutions earn forex through payments made by overseas entities and individuals, they are not able to use the duty-free import entitlement available under the scheme.
Therefore, they want provisions for transferring the entitlement to other parties and earn premium.
More flexibility for the export-promotion window is expected when commerce & industry minister Kamal Nath announces the annual supplement to the Foreign Trade Policy on Friday.
Provisions are being made to include rupee payments by foreign tourists eligible for being calculated as foreign exchange earning under Served From India.
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���Many foreigners exchange currency soon after landing here and pay hotels in the Indian currency. Provisions will be made to take such payments also into account, while calculating the forex earning of the service provider concerned,��� senior government officials said.
Hotels are entitled to duty-free import up to the value of 5% of their forex earnings of the previous year under the Served from India scheme, which is meant for service sector exports.
The RBI issued a circular last year that hotels should accept rupee payments from foreign guests and not insist on forex payment. It is felt that the decision would lead to lower forex earnings for hotels in the long run. Hence, the move to calculate rupee payments by foreign tourists as forex earnings.
Service sector companies had also called for doubling the duty-free import entitlement to 10% under Served from India. This plea has been rejected, they said. Due to irregularities detected recently by the Directorate of Revenue Intelligence (DRI), the government is also banning import of cars under this scheme.
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Provisions are being made in the FTP to allow duty-free supply of aviation turbine fuel (ATF), to foreign airlines. This would include waiver of all taxes including local levies, officials said.
While the Target Plus scheme has been scrapped, a new window of export promotion is being opened for boosting exports to Africa, CIS countries and Latin America.
ADVERTISEMENT
This is likely to be a new thrust area for the export promotion along with key products like handlooms, handicrafts, stationary, toys, processed food, fireworks, leather goods, fish and sports goods. The selection of items is on the basis of employment-generation capability, they said.
The DEPB scheme is expected to be valid for the whole of ���06-07 to provide stability to exporters. This is being done in view of the sharp criticism about lack of stability in export-promotion policies.
���How will exporters negotiate their prices if fiscal incentives are changed frequently,��� wondered Delhi Exporters Association (DEA) president SP Agarwal. Denial of Target Plus benefits with retrospective effect was a major blow for exporters of foodgrain, petro products and minerals, he added.
Officials said the duty free replenishment certificate (DFRC) scheme, which helps exporters to import inputs without paying duty is being merged with a couple of other similar schemes.
The new framework for this facility is expected to be in shape of an advance licence, which could be transferred in case the exporter opts for sourcing domestic raw materials. The minimum value addition norm for this scheme is expected to be lower than the 25% fixed under DFRC.
A FRESH FACE
Rupee payments by tourists to be counted as forex earning Simplification of Served from India scheme on cards Foreign airlines to get duty-free fuel.
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