Schemes

The export of Notified Merchandise is eligible for rewards subject to conditions. The reward is in the form of Transferable Scrips @ 2% to 7%on realised FOB value of exports in free foreign exchange or on FOB value of exports as given in theShipping Bills in freely convertible foreign currencies, whichever is less, unless otherwise specified. This reward is in addition to EPCG and Advance Authorisation benefits. This reward is for Exports of notified goods/products with ITC[HS] code to notified marketsas listed in Appendix 3B. Appendix 3B also lists the rates of rewards on various notified products.

Rewards:

The reward under MEIS scheme is in the form of freely transferable Duty Credit Scrips which can be easily monetised. The Duty Credit Scrips & goods imported / domestically procured against them are freely transferable.

Ineligible categories under MEIS

• Supplies made from DTA units to SEZ units
• Export of imported goods covered under paragraph 2.46 of FTP
• Exports through trans-shipment, meaning thereby exports that areoriginating in third country but trans-shipped through India
• SEZ/ EOU /EHTP/ BTP /FTWZ products exported through DTA units
• Export products which are subject to Minimum export price orexport duty
• Deemed Exports
• Exports made by units in FTWZ

EPCG (Export Promotion Capital Goods) scheme was first introduced in 1990 under the Import Export Policy 1990-93. It is almost 30 years now. The scheme is the most tried and tested scheme for promotion of Exports. This scheme led to the growth of exports as the custom duties were really very high during that period. It helped the exporters in technological upgradation as well as reducing the initial cost of capital goods.This scheme has primarily helped exporters to become more competitive as it reduces the initial cost on capital goods. The introductory remarks to Import and Export Policy 1990-93 were “for sometime past there had been a persistent demand from the trade and industry to introduce a scheme whereby capital goods could be imported at Zero Duty for strengthening the export production base, accompanied by suitable export obligation. While it has not been possible at this stage to agree to demand for duty free import of capital goods for export production, Government has decided to allow such import a concessional rate of duty, subject to suitable export obligation being accepted by the exporter. This represents a major step forward towards making our export internationally competitive.”

In terms of above declarations, provisions were made vide para 197 of Policy 1990-93 which states that “with a view to reduce the incidence of high capital cost on export prices and thereby making export competitive in the international market, import of new capital goods upto a maximum CIF value of Rs. 10 crores will be permitted at concessional rate of customs duty of 25% of CIF value of capital goods imported. The above facility will be available to registered Manufacturer exporters, who have been regularly exporting for a period of not less than three years. The applicant will have to take an Export obligation equivalent to three times the value of the capital goods permitted for import and the obligation will have to be fulfilled within a period of 4years from the date of import of capital goods

The EPCG scheme was introduced when general rate of customs duty on import of capital goods was very high. As customs duty on capital goods was cut, DGFT formulated new schemes from time to time under EPCG and one such scheme was for import of capital goods at 15% duty with E.O. of 4 times to be fulfilled in 5 years announced in 1992 and this duty was further lowered to 10% in 1997, 5% & in 2000than Zero Duty EPCG for few sectors and 3% Duty EPCG for all sectors. From April 2013, the government has merged Zero Duty EPCG and 3% EPCG Scheme into one scheme which is now known as Zero Duty EPCG Scheme covering all sectors.

AEO is a trade facilitation scheme for ease of doing business in light of international development holder of this certificate is entitled for privilege, benefits, exemption and relaxation on account of import and export. This certificate is issued for particular period after that it has to be renewed

Anyone involved in the international supply chain that undertakes customs related activity in India can apply for AEO status irrespective of size of the business. There is no provision to grant AEO status to specific site, division or branch of legal entity of applicant. The application must cover all the activities and locations of the legal entity involved in the international supply chain

There should be no show-cause notice issued to the applicant during last three financial years, involving fraud, forgery, outright smuggling and clandestine removal of excisable goods or cases where service tax has been collected from customers but not deposited to the Government. There should be no case wherein prosecution has been launched or is being contemplated against the applicant or its senior management. The ratio of disputed duty demanded or drawback demanded or sought to be denied, in all the show cause notices issued under the Customs Act, 1962 during the last three financial years, to the total duty paid and drawback claimed during the said period is not more than ten per cent

AEO is a trade facilitation scheme for ease of doing business in light of international development holder of this certificate is entitled for privilege, benefits, exemption and relaxation on account of import and export. This certificate is issued for particular period after that it has to be renewed

Units undertaking to export their entire production of goods andservices(except permissible sales in DTA), may be set up under theExport Oriented Unit (EOU) Scheme, Electronics HardwareTechnology Park (EHTP) Scheme, Software Technology Park(STP) Scheme or Bio-Technology Park (BTP) Scheme for manufacture ofgoods, including repair, re-making, reconditioning, re-engineering,rendering of services, development of software, agriculture includingagro-processing, aquaculture, animal husbandry, bio-technology,floriculture, horticulture, pisciculture, viticulture, poultry andsericulture. Trading units are not covered under these schemes. Only projects having a minimum investment of Rs.1 Crore in plant & machinery shall be considered for establishment as EOUs. However, this shall not apply to existing units, units in EHTP / STP/ BTP, and EOUs in Handicrafts /Agriculture / Floriculture / Aquaculture / Animal Husbandry /Information Technology, Services, Brass Hardware and Handmade jewellery sectors. BOA may allow establishment of EOUs with a lower investment criteria.

Export and Import of Goods:

• An EOU / EHTP / STP / BTP unit may export all kinds of goods andservices except items that are prohibited in ITC (HS). Howeverexport of gold jewellery, including partly processed jewellery,whether plain or studded, and articles, containing gold of 8 caratsand above upto a maximum limit of 22 carats only shall be permitted
• Export of Special Chemicals, Organisms, Materials, Equipment andTechnologies (SCOMET) shall be subject to fulfilment of theconditions indicated in ITC (HS). In respect of an EOU, permission toexport a prohibited item may be considered, by BOA, on a case tocase basis, provided such raw materials are imported and there is noprocurement of such raw material from DTA
• Procurement and supply of export promotion material like brochure/ literature, pamphlets, hoardings, catalogues, posters etc up to amaximum value limit of 1.5% of FOB value of previous years exportsshall also be allowed
• An EOU / EHTP/ STP/ BTP unit may import and / or procure,from DTA or bonded warehouses in DTA / internationalexhibition held in India, all types of goods, including capitalgoods, required for its activities, provided they are notprohibited items of import in the ITC (HS)
• Units shall alsobe permitted to import goods including capital goods requiredfor approved activity, free of cost or on loan / lease from clients.
• Import ofcapital goods will be on a self-certification basis.Goods imported by a unit shall be with actual user conditionand shall be utilized for exportproduction.
• EOU/EHTP/STP/BTP units may import/procure from DTA, with orwithout payment of duties/taxes as provided. Software EOU/ DTA units may use such facility for export ofsoftware.

The duty drawback scheme allows exporters to get a refund on customs duty paid on imported goods where those goods are to be treated, processed or incorporated in other goods for export or are exported unused since importation. The central government may revise amount or rates determined under rule 3

“SCOMET” is the nomenclature for dual use items of Special Chemicals, Organisms, Materials, Equipment and Technologies (SCOMET). Export of dual-use items and technologies under India’s Foreign Trade Policy is regulated. It is either prohibited or is permitted under an Authorisation. An application for grant of Export Authorisation in respect of restricted items [other than Special Chemicals, Organisms, Materials, Equipment and Technologies (SCOMET)] mentioned in Schedule 2 of ITC (HS) Classifications of Export and Import Items may be made to DGFT (Headquarters) along with documents prescribed therein.

If the exporter has been notified in writing by DGFT or he knows or has reason to believe that an item not covered in the SCOMET list has a potential risk of use in or diversion to weapons of mass destruction (WMD) or in their missile system or military end use (including by terrorists and non-state actors), the export of such an item may be denied or permitted subject to the grant of a license, as per the procedure provided for SCOMET items

Maintenance of Records:

Every SCOMET authorisation holder shall maintain the following records in manual or electronic form for a period of 5 years from the date of export or import, as applicable:

• All documents submitted while making an application for SCOMET Authorization.
• Correspondence with buyer/consignee/end-user or DGFT or relevant Government agency
• Relevant Contracts
• Relevant Books of account
• elevant Financial records
• Any communication from any government agency related to an application for authorization for any item on the SCOMET list or a commodity classification request