Export Import (Exim) Policy Benifits for Export Business.
Export Import Policy or better
known as Exim Policy is a set of guidelines and instructions related to the
import and export of goods. The Government of India notifies the Exim
Policy for a period of five years (1997 2002) under Section 5 of the Foreign
Trade (Development and Regulation Act), 1992. The
current policy covers the period 2002 2007. The Export Import Policy is updated
every year on the 31st of March and the modifications, improvements and new
schemes becames effective from 1st April of every year. All types of
changes or modifications related to the Exim Policy is normally announced by the
Union Minister of Commerce and Industry who coordinates with the Ministry of
Finance, the Directorate General of Foreign Trade and its network of regional
Duty free import facility for service sector having a
minimum foreign exchange earning of Rs. 10 lakhs. The duty free
entitlement shall be 10% of the average foreign exchange earned in the
preceding three licensing years.
However, for hotels the same shall be 5 % of the average foreign
exchange earned in the preceding three licensing years. Imports of
agriculture and dairy products shall not be allowed for imports
against the entitlement. The entitlement and the goods
imported against such entitlement shall be non transferable.
- Duty free import entitlement for status holder
having incremental growth of more than 25% in FOB value of
exports (in free foreign exchange). This facility shall however be
available to status holder having a minimum export turnover of
Rs. 25 crore (in free foreign exchange).
- Annual Advance Licence facility for status holder
to be introduced to enable them to plan for their imports of raw material
and component on an annual basis and take advantage of bulk
- Status holder in STPI shall be permitted free movement
of professional equipments like laptop/computer.
- To give a boost to electronic hardware industry,
supplies of all 217 ITA1 items from EHTP units to Domestic
Tariff Area (DTA) shall qualify for fulfillment of export obligation.
- To promote growth of exports in embedded software,
hardware shall be admissible for duty free import for testing and
development purpose. Hardware up to a value of US$ 10,000 shall be
allowed to be disposed off subject to STPI certification.
- 100% depreciation to be available over a period of
3 years to computer and computer peripherals for units in EOU/EHTP/STP/SEZ.
- Diamonds & Jewellery Dollar Account for exporters
dealing in purchase /sale of diamonds and diamond studded jewellery .
- Nominated agencies to accept payment in dollar for
cost of import of precious metals from EEFC account of exporter.
- Gem & Jewellery units in SEZ and EOUs can
receive precious metal Gold/silver/platinum prior to export or post
export equivalent to value of jewellery exported. This
means that they can bring export proceeds in kind against the
present provision of bringing in cash only.
- Import of 69 items covering animals
products, vegetables and spice antibiotics and films removed
from restricted list
- Export of 5 items namely paddy except basmati,
cotton linters, rare, earth, silk, cocoons, family planning device except
condoms, removed from restricted list.
- Sales from Domestic Tariff Area (DTA) to SEZ to be
treated as export. This would now entitle domestic suppliers to
Duty Drawback / DEPB benefits, CST exemption and Service Tax
- Agriculture/Horticulture processing SEZ units will now
be allowed to provide inputs and equipments to contract
farmers in DTA to promote production of goods as per the requirement
of importing countries.
- Foreign bound passengers will now be allowed to take
goods from SEZs to promote trade, tourism and exports.
- Domestics sales by SEZ units will now be exempt
- Restriction of one year period for remittance of export
proceeds removed for SEZ units.
- Netting of export permitted for SEZ units provided it is
between same exporter and importer over a period of 12 months.
- SEZ units permitted to take job work abroad and exports
goods from there only.
- SEZ units can capitalize import
- Wastage for sub contracting/exchange by gem and
jewellery units in transactions between SEZ and DTA will now be
- Export/Import of all products through post parcel
/courier by SEZ units will now be allowed.
- The value of capital goods imported by SEZ units
will now be amortized uniformly over 10 years.
- SEZ units will now be allowed to sell all
products including gems and jewellery through exhibition and duty free shops
or shops set up abroad.
- Goods required for operation and maintenance
of SEZ units will now be allowed duty free.
Provision b,c,i,j,k and l of SEZ (Special Economic Zone) scheme , as mentioned above,
apply to Export Oriented Units (EOUs) also. Besides these, the other
important provisions are:
- EOUs are now required to be only net
positive foreign exchange earner and there will now be no export
- Period of Utilization raw materials
prescribed for EOUs increased from 1 years to 3
- Gems and jewellery EOUs are now being permitted
sub contracting in DTA.
- Gems and jewellery EOUs will now be entitled
to advance domestic sales.
- The Export Promotion Capital Goods (EPCG) Scheme shall
allow import of capital goods for preproduction and post
production facilities also.
- The Export Obligation under the scheme shall be
linked to the duty saved and shall b 8 times the duty saved.
- To facilities upgradation of existing plant
and machinery, import of spares shall be allowed under the
- To promote higher value addition in export,
the existing condition of imposing an additional Export Obligation of
50% for products in the higher product chain to be done
- Greater flexibility for fulfillment of export
obligation under the scheme by allowing export of any other
product manufactured by the exporter. This shall take care of
the dynamics of international market.
- Capital goods up to 10 years old shall also be allowed
under the Scheme.
- To facilitate diversification in to the software
sector, existing manufacturer exporters will be allowed of
fulfill export obligation arising out of import of capital goods under
the scheme for setting up of software units through export of
manufactured goods of the same company.
- Royalty payments received from abroad and testing
charges received in free foreign exchange to be counted for discharge
of export obligation under EPCG Scheme.
- Facility for pro visional Duty Entitlement Pass
Book(DEPB) rates introduced to encourage diversification and
promote export of new products.
- DEPB rates rationalize in line with general reduction in
- Duty Free Replenishment Certificate (DFRC) scheme
extended to deemed export to provide a boost to domestic manufacturer.
- Value addition under DFRC scheme reduced
from 33% to 25%.
- Actual user condition for import
of second hand capital goods up to 10 years old dispensed with.
- Reduction in penal interest rate from 24% to 15%
for all old cases of default under Exim policy
- Restriction on export of warranty spares removed.
- IEC holder to furnish online return of
importers/exporters made on yearly basis.
- Export of free of cost goods for export
promotion @ 2% of average annual exports in preceding
three years subject to ceiling of Rs. 5 lakhs permitted.
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