- Simplification of Notifications
Notifications issued by Departments should be minimum & user friendly. From the subject itself the user should get the theme of the notifications.
- Interest on duty foregone under duty exemption schemes
The Exim Policy provides import of Capital Goods, raw materials, components, consumables etc. either under concessional duty rate or at zero duty for carrying out manufacturing activities with time bound export obligations.
Due to some unavoidable changed circumstances, if the importer is not able to fulfill the obligation, then importer needs to regularise the imports on payment of duty + interest @ 15% p.a.
Under the prevailing market conditions, the ruling interest rate is in the range of 6% to 8% p.a for all types of transactions. To reduce the burden and to bring down the transaction cost, the interest rate for regularisation of imports need to be plugged max. @ 10% p.a. Exporters who undertake the business risks can survive during uncertainties.
- Self Assessment for Imports
Excise and Sales tax rules provide opportunity to the assessee to assess the duty and pay to the government periodically. Only audit check is done on post payment activities. Government need to come out with such self assessment schemes which will enable importer to move the goods from the ports on arrival and pay duty on self assessment basis. Customs can introduce Audit checks to check adequacy similar to excise and sales tax.
The above will help better utilization of scarce and expensive port facility and reduce the transaction costs.
The facility needs to be extended for import clearances also. Indian Port Authorities to look up global standard of operations and eliminate multiple handling and improving the port productivity levels.
- Export benefits like DEPB /DGFC / Advance License
The above export incentives are admitted only for exports against Hard Currency and denied for Rupee trade. As a result Rupee trade with neighbouring countries are less attractive and as a result full potential is not realised. This also affects our competitiveness vis-à-vis other countries in these markets. The above export Incentives need to cover export under rupee trade also, especially with SAFTA being negotiated currently.
- Tools Imported For Specific Activity
Calibration equipments and tools brought by Overseas technicians / specialists for erection, commissioning and serving of equipments supplied , imports made on re-export basis is liable for Customs duty.
At present the provision is to pay customs duty and claim duty draw back under Section 74. The process is cumbersome and takes long lead time. Needs provision to custom clear against bond an cancellation after re-export
Imports in advance or as baggage be permitted without duty on condition of re-export.
- Advanced Technology Has Demerits
Imports under CTH 49.11 attracts Nil duty if imported in Hard copy form. However, if the same is imported in the form of CD, Customs duty is applicable. The anomaly needs to be removed Manuals, drawings et covered under scope of CTH 49.11 if imported in CD ROM, customs duty to be exempted.
- Duty Free Credit Entitlement Licence
Licensing authorities are issuing DFCE licence for service providers served from India as per para 184.108.40.206 of Foreign Trade Policy 2004-09, which is cover under Customs Notification 54/2003-cus dated 01-04-2003.
Whereas the Licensing authorities are not issuing DFCE Licence for Status Holders (Manufacturer & Exporters), which is covered under customs notification 53/2003-cus dated 01-04-2003. Even if they have issued, the licence is not operative, for the reason that Customs are insisting that the Licence should read as "DFCE issued for Status Holder", whereas it is mentioned as "Service Provider served from India Scheme".
Advance Income tax has been paid (approx. 36%) for this accrued export benefit-DFCE Licence, whereas it is not operational.
The last date for submission of DFCE application for Status Holder has been extended to 31-03-2005 from 31-12-2004 as per Policy circular No. 12/2004-09 dated 28-12-2004, which shows the intention of Licensing authority for issuing DFCE Licence for Status Holders.
(i) The licensing authority should consider Manufacturer Exporters (Status Holder) at par with Service providers served from India, and issue DFCE Licence, as stated in Exim Policy 2002-2007. For the Licenses already issued, the amendment as required by Customs "DFCE issued for Status Holder" may please be incorporated in the Licence, so that it can be made operational.
(ii) Customs Notification 53/20036 dated 1-4-2003 may be amended permitting the Status Holder to pay CVD at the time of Import, so as to enable them to avail Cenvat Credit, as in the case of DEPB Licence amended as per Cus. Notfn. 96/2004 dated 17-09-2004 (para v & vi).
Under Para 3.7.7 of Foreign Trade Policy, for the Target Plus Scheme, "the CVD Paid in Cash or through debit under the said licence, shall be adjusted as CENVAT Credit or Duty Drawback as per rules framed by Dept. of Revenue."