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Government of India
Ministry of Commerce & Industry
Department of Commerce
Directorate General of Foreign Trade
Udyog Bhawan, New Delhi
Trade Notice No. 16/2016
Date: 14th September 2016
To
- All RAs of DGFT
- Customs Authorities
Subject: Guidelines for Issuance of Duty Credit Scrips under
Incremental Export Incentivisation Scheme (IEIS) for Quarterly period
(01.01.2013 to 31.03.2013) in pursuance of
Trade Notice 04 dated 05.05.2016.
The Incremental Export Incentivisation Scheme (IEIS) for Quarterly basis
(01.01.2013 to 31.03.2013) was introduced vide
Notification No.27 dated
28.12.2012. Under this scheme, an IEC holder was entitled for duty credit scrip
@ 2% on the incremental growth during the period 01.01.2013 to 31.03.2013
compared to the period from 01.01.2012 to 31.03.2012 on the FOB value of export
subject to conditions prescribed therein.
2. Vide
Trade Notice No. 04 dated 05.05.2016, clarification regarding benefit
under Incremental Export Incentivisation Scheme (IEIS) was issued by this
Directorate and instructions were issued for processing the cases of the IEIS
claims by RAs without imposing any cap on account of the earlier stipulation of
restricting growth to 25% or incremental growth of Rs. 10 crore in value,
whichever is less.
3. In pursuance of the
Trade Notice No.4 dated 05.05.2016, changes in
entitlement in the online system for the IEIS Quarterly cases has been
incorporated and list of such cases where Supplementary Scrip is to be issued is
made available in the Online Application Menu of the Quarterly IEIS Scheme.
4. All the concerned RAs now have facility to re-open the files in such cases
for issue of the balance claim pending after deducting the initial Scrip value
and process such cases for issuance of Scrips for the balance entitlement after
ensuring taking due diligence as indicated in the
Trade Notice 4/2016 dated
05.05.2016 earlier instructions on scrutiny of claims.
5. RAs shall exercise due diligence while processing such claims by following
guidelines of greater scrutiny as prescribed in
Public Notice No. 28 dated
25.09.2013 to check claims having high growth percentage and/or value against
irregularities if any. Where the export growth or total claim under Scheme is
excessive and out of trend, RA would check claims in detail, including where
necessary by seeking help from Customs, DRI etc. In this regard
Notification
No.27 dated 28.12.2012 may also be carefully seen, in addition other relevant
FTP/HBP provisions. Inter alia, transfer of export performance any other IEC
holder is not permitted under the scheme as per Para 3.14.4 (d) FTP 2009-14.
Similarly disclaimer provision of Para 3.17.10(b) of FTP 2009-14 also not
admissible as per Para 3.14.4(e) of FTP 2009-14.Therefore, applicants who have
purchased goods from another legal entity who is also having IEC not entitled
for benefit under the Scheme on such purchases of goods. More generally, no
right is vested in cases where irregularities have been resorted to applicants.
6. It has been observed from the list of file numbers provided by the NIC
many of the firms have filed multiple applications. In the list it is observed
many of the firms have shown different export performance under such different
file numbers for the base period ( 01.01.2012 to 31.03.2012) and the claim
period (01.01.2013 to 31.03.2013) .
In this regard, the provisions of the HBP and the ANF 3F are specified below:
i. As per
Public Notice No. 13 dated 17.05.2013, in the prescribed ANF 3E had
clearly been mentioned that that export shipments from all EDI can be filed in
one application while for export shipments from each EDI ports, separate
application is required to be filed. Such applications have to be filed in the
same RA.
ii. The applicant firm is required to declare the past export performance
during the 2011-12 (base year) and 2012-13(claim year).
iii. The applicant firm is required to declare the past export performance
during the base period ( 01.01.2012 to 31.03.2012) and the claim period
01.01.2013 to 31.03.2013).
iv. The Chartered Accountant is also required to certify in the Annexure to
3F , the past export performance during the base period ( 01.01.2012 to
31.03.2012) and the claim period ( 01.01.2013 to 31.03.2013).
7. In view of the above prescribed procedures, filing of multiple
applications with different export performance under different file numbers,
except as prescribed in the ANF 3F, is in clear violation of the procedure
prescribed. In all such cases, the RAs shall take necessary actions as per
relevant sections of the FT (D & R) Act 1992 as amended from time to time,
including processing of cases for placing such firms under DEL, as per
applicable Rules/Provisions for violation of the prescribed procedures and
furnishing of declaration, statement and documents with false material
particulars. RAs should also take action against such Chartered Accountants and
report such fraudulent practices to the Institute of Chartered Accountants of
India (ICAI).
8. As per Paragraph 3.14.4(a) of the FTP 2009-14, the objective of the Scheme
is to incentivize incremental exports. As per Para 3.14.4(b) of the FTP 2009-14,
an IEC holder would be entitled for a duty credit scrip @ 2% on the incremental
growth (achieved by the IEC holder) during the period 01.01.2013 to 31.3.2013
compared to the period from 01.01.2012 to 31.3.2012 on the FOB value of exports.
As per Para 3.14.4(c) of the FTP 2009-14, quantum of benefit will be calculated
on the incremental growth achieved subject to eligibility criteria given in Para
3.14.4(d) of FTP 2009-14. As per Para 3.14.4(d) 2009-14, benefit under this
scheme will not be allowed to an exporter who had made no export between
01/01/12 to 31/03/12. However, it is observed from some of the applications that
such firms have given very nominal/negligible growth values in the base period
of 01.01.2012 to 31.03.2012. The applicants who did not have any exports in the
base period (01.01.2012 to 31.03.2012) have filed applications by mentioning
export value as low as Rs. 01/- just to bypass the system checks. Therefore, in
all such cases, the RAs shall take necessary actions as per relevant sections of
the FT (D & R) Act 1992 as amended from time to time, including processing of
cases for placing such firms under DEL as per applicable Rules/Provisions for
violation of the prescribed procedures and furnishing of declaration, statement
and documents with false material particulars. RAs should also take action
against such Chartered Accountants and report such fraudulent practices to the
Institute of Chartered Accountants of India (ICAI).
9. For cases already processed, RAs shall also take steps for Post issuance
verification for cases where there is very high growth /claim value and in case
any irregularity is found at any stage, the benefit would be withdrawn and penal
action under the FT (D & R) Act or any other law for the time being in force
shall be initiated against such applicants.
10. The
Trade Notice 04 dated 05.05.2016 and this notice is applicable for
all claims whether pending/ fresh ones / or those which were issued with cap
earlier pertaining to the said Quarterly IEIS Scheme only.
11. The date of initial complete application may be considered as the date
for determining the applicable late cut. No supplementary cut shall be imposed
in terms of Para 9.4 of the HBP 2009-14 if the application for the entire claim
has already been applied in the initial application within specified time
limits. The validity period of such scrips shall be 18 months from the date of
issue of the supplementary Scrip.
12. The RAs are also informed that applicant firms who have given reduced
export performance details once at any time will not be given any benefit of
re-applying with changed export performance.
(Lokesh HD)
Deputy Director General of Foreign Trade
e-mail : [email protected]
(Issued from File No.01/61/180/57/AM15/PC-3)
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