The Central Board of Excise and Customs (CBEC) has put in place a
comprehensive mechanism for verification and monitoring of exports made
under various duty exemption or reward schemes.
The Foreign Trade Policy has outlined various trade promotion schemes
for exporters and importers like advance authorisation, duty-free
import authorisation, as well as the export promotion capital goods
(EPCG) scheme.
In advance authorisation and duty-free imports, the customs
department gives a certificate to an exporter to import freely certain
amount equivalent to the amount of exports, and goods related to its
exports done.
Sometimes this credit given prior to the exports is done and, thus,
it is called advance authorisation. These certificates are called duty
credit scrips.
The decision to set up a centralised monitoring mechanism over and
above the monitoring procedures under different port jurisdictions
follows reports received from the field formations, which indicated
discrepancies during the verification of the duty credit scrips,
officials said. Officials also added that such discrepancies have huge
revenue implications. Following such reports, the board has also
examined all trade promotion schemes under the Foreign Trade Policy.
For trade benefits for export of capital goods under EPCG, the
Customs authorities at the relevant port have been directed to check the
installation certificate within six months of completion of imports.
The authorities will also ensure fulfilment of 50 per cent of export
obligation under this scheme in the first phase before awarding export
credits. Under EPGC, exports get trade benefits for importing goods
necessary for exports of capital goods. In revenue terms, these benefits
run into huge sum since it involves capital goods, explained officials.
Installation certificate involves clearance that the importer has
already installed necessary machinery in India which it has imported and
which is required for manufacturing goods meant for exports. The
Customs authorities have been directed to conduct random verification of
benefits under EPCG/DFIA/advance authorisation schemes. The
notification issued by the board states that this is required since EPCG
requires installation of the capital goods and the Advance
Authorisation scheme (and DFIA scheme in some cases) contemplates actual
usage of the imported goods.
The department has also been asked to verify the genuineness of
scrips or certificates of duty credit before allowing registration of
such scrips. For this purpose, random verification of the shipping bills
based on which the said duty credit scrip has been issued shall be
checked to ascertain the genuineness of such shipping bills. For every
export, the exporter gets certificate for duty-free import of
export-related goods. The shipping bills relate to such exports,
explained an official.
A quarterly report on the outcome of the said verification will be
forwarded to the Board, which should include details of the
discrepancies noticed during the verification and the measures taken to
redress such discrepancies.
In case of default of export obligation under these schemes, an
importer/exporter should pay proportional duty of unfulfilled portion of
export obligation along with interest from the date of clearance of
goods. Such payments should be paid within three months from the expiry
of duty payment date.
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