12 Key points to know about Revised Foreign Trade Policy 2015–20
DECEMBER 06, 2017
By Kalirajan D, Advocate
THE much awaitedmid-term review of the Foreign Trade Policy 2015 – 20 (for brevity 'the FTP 2015 – 20') has been completed and the revised FTP 2015 – 20 has been notified by the Central Government vide Notification No. 41/2015-2020 dated 05.12.2017.Basically, the FTP 2015 – 20 has been amended in such a way that it is in line with the provisions of Goods and Services Tax (for brevity 'GST').It also provides impetus to specified labour intensive industries,such as, Textile, leather, agriculture, carpets, marine-products, etc., and also specified service sectors, by way of providing enhanced benefits under the Merchandise Export from India Scheme and the Service Export from India Scheme (for brevity 'MEIS'& 'SEIS').Following are the major key points one should know about the Revised FTP 2015 – 20.
MEIS & SEIS Scheme
1. SEIS Rate has been increased from 5% to 7% for export of Professional Services, R&D Services, Rental & Leasing services, Business services, Tourism related services, Recreational, Cultural, and Sporting services, Transport services, Construction and related Engineering services, Educational services, and Health related and Social services. Notified SEIS Rate would be valid till 31.03.2018. It will be revised and announced at later point of time.
2. MEIS Rate has been increased from 5% to 7% for export of specified Agricultural products, Textile, leather, agriculture, carpets, marine-products, etc.
3. Few ineligible categories of exports/sectors provided under the Para 3.06 and 3.09 of FTP 2015–20 has been shifted to the Appendix 3B & 3D of HBP 2015 - 20. This may be with a view to empower the DGFT to amend such ineligible categories/sectors, from time to time.
Advance Authorisation Scheme
4. Trust Based Self Ratification Scheme: Where SION is not notified by the DGFT, an Authorised Economic Operator (AEO)can obtain the Advance Authorisation based on the wastage norms declared by them to be certified by the Independent Chartered Engineer. Such cases will not be referred to the Norms Committee for fixation of Adhoc norms. This facility may be extended to other categories of exporter also.
5. Installation certificate has to be obtained from the jurisdictional Customs Authorities instead of Central Excise Authorities, or from the Independent Chartered Engineer, at the option of the EPCG Holder.
6. Capital goods installed at one unit are permitted to be shifted to another unit, provided the other unit is appearing in the IEC and RCMC of the EPCG Holder.
7. New Appendix 5F, listing out the negative list of items not permitted to be imported under the EPCG scheme has been notified.
8. Administrative control has been shifted from the Central Excise Authorities to the Customs Authorities. No Due Certificate has to be obtained from the Customs Authorities for exiting from the EOU Scheme.
9. No value limit on DTA sale of goods by an EOU. Limit on DTA sale upto 50% of FOB value of exports has been removed. However, said value restriction continues for DTA sale of services. Advance DTA sale retained upto 50% of estimated exports for first year.
10. Scope of 'Deemed exports' for the purpose of the FTP and the GST is explained.
11. Erstwhile list of categories of Deemed Exports for the purpose of FTP continues except supply of Marine Freight Containers by 100% EOU which is now excluded.
12. TED refund benefit is restricted for supply of Excisable products under Schedule 4 of Central Excise Act 1944, to the AA holder and to the EOU.
(The above article only highlights the major changes and is not an exhaustive list. Author is associated with Lakshmikumaran & Sridharan and views expressed above are strictly personal.)
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