Key highlights of ES about Export Promotional Schemes
FEBRUARY 01, 2020
By Vaishali Kharde, CA
ECONOMIC Survey 2019-20 (ES) highlights the major reforms announced by the Government in various Export Promotional Schemes in the last financial year to enable the growth in export. Additionally, ES highlights about the present status of the world trade disputes of India related to Export Policies. The brief synopsis of ES about Export Promotional Schemes is given in the paragraphs given below
Key initiatives contributing to reduction in cargo release time for Trade Facilitation
ES specifies the key initiatives of the last financial year which act as a contribution towards reduction in overall cargo release time:
• Enablement of Single Window Interface for Facilitating Trade (SWIFT) on Customs Portal
• Enablement of post clearance audit
• Self e-sealing through RFID tag by trusted exporters
• Requirement of only 3 mandatory documents for import/export
• Introduction of ‘E-Sanchit' for lodging supporting documents online
• Tracking of imported cargo clearance time through Indian Customs Ease of Doing Business Dashboard (ICEDASH)
• 24X7 online customs clearance facility
• Elimination of merchant overtime fees
• Launch of Atithi mobile App for international passengers and
• Elimination of merchant overtime fees and installation of drive through scanners
Additionally, ES states that as per UN global survey on digital and sustainable trade facilitation, India has improved its overall trade facilitation score from 69% to 80% in 2019-20. Thus, export leading towards digitization to reduce the Cargo release time.
Certain Key Changes in present Schemes of Export Promotion
At present, ten major schemes for Export Promotion are operational. ES lists down the major changes in present Schemes of Export Promotion made in the last year with an aim to ease worldwide trade.
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No
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Schemes
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Major Changes in Last FY 2019-20 as mentioned in ES
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1.
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Merchandise Exports from India (MEIS)
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The process is now digitized end to end from application till final issuance of the MEIS scrip without any manual interface.
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2.
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Services Exports from India Scheme (SEIS)
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Service Exporters are now eligible for SEIS at the rate of 5 per cent and 7 per cent of the Net Foreign Exchange Earnings (NFEE) for exports made in a Financial Year
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3.
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Export Promotion Capital Goods (EPCG)
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Capital goods imported under EPCG authorizations for physical exports are also exempt from Integrated Goods and Services Tax (IGST) and Compensation Cess up to 31.03.2020
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4.
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Advance Authorization (AA)
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AA issued to allow duty free import of inputs, which are physically incorporated in export products.
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5.
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Duty Free Import Authorization (DFIA)
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DFIA issued on post export basis for products for which Standard Input Output Norms have been notified.
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6.
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Interest Equalization Scheme (IES)
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IES rate has increased from 3 per cent to 5 per cent for exports made by MSME sector on Pre and post Shipment Rupee Export Credit w.e.f. 02.11.2018.
The merchant exporters have also been included at the of 3 per cent under IES w.e.f. 02.01.2019.
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7
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Deemed Exports Scheme
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Under the GST regime, the Duty Drawback is limited to exemption/ refund of basic custom duties.
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8.
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Transport and Marketing Assistance (TMA) for Specified Agriculture Products Scheme
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TMA scheme for specified agriculture products was launched in February, 2019 and is available for exports occurring from 01.03.2019 to 31.03.2020.
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India and WTO
As is well known, few weeks earlier, WTO's Appellate Body has become dysfunctional and thus, unable to continue to resolve the disputes. In this regard, the Economic Survey 2019-20 (‘ES') highlights the steps taken by India.
ES states that India has submitted a paper in the General Council meeting of the WTO collectively with other developing countries prescribing the priorities that are require to be taken into consideration while undertaking reforms in the WTO.
The submission made to General Council mainly aims for preservation of core principles of the Multilateral Trading System, safeguarding special and differential treatment provisions, resolution of the Appellate Body crisis, addressing unilateral actions and continuation of negotiations in mandated areas, among others. In this submission, India has emphasized that special and differential treatment provisions are essential for better integration of the developing countries in the global trading system.
Way forward
It is observed that the ES does not mention about the way forward for withdrawal of the disputed Export Promotional Policies as per WTO penal decision. Thus, the industry has to wait for more clarification for new export promotional schemes or amendment in existing schemes.
(The author is Associate Director at Pritam Mahure and Associates and the views expressed are strictly personal.)
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