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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. 06/2018
Date: 8th May 2017
To
1. All RAs of DGFT
2. Customs Authorities
Subject: Implementation of the Hon’ble Supreme Court’s Judgment dated
27th Oct 2015 in Civil Application No. 554 of 2006 with regard to Target Plus
Scheme (TPS) Scrips for the exports made in the year 2005-06 over 2004-05.
a. Background: Target Plus Scheme as a part of Foreign Trade
Policy was announced on 31.08.2004 w.e.f. 01.04.2004. The objective was to
accelerate growth in exports by rewarding Star Export Houses with minimum
threshold export turnover of ₹ 10 Crore in the previous year. The Scheme
provided for three slabs of entitlement of duty credit scrips: 5/10/15% based on
the percentage incremental growth of exports: 25%/25-<100%/100% and above
respectively. The Scheme was in operation for the years 2004-05 and 2005-06.
b.
Litigation & Judgement: In the TPS for 2005-06, Directorate General of Foreign
Trade (DGFT), vide Notification No. 48 dated February 20, 2006 had made certain
products ineligible for claiming the benefit under Target Plus Scheme (TPS) and
vide Notification No.8 dated June 12, 2006 had reduced rates of entitlement to
5% from earlier 5, 10 and 15% w.e.f 01.04.2005 respectively. Both these
Notifications dated 20.02.2006 & 12.06.2006 were challenged in various High
Courts and finally in the Supreme Court. Hon’ble Supreme Court on 27.10.2015 at
Para 134 of the Judgement held that Notification No. 48/2005 dated February 20,
2006 and Notification No. 8/2006 dated June 12, 2006 cannot be applied
retrospectively and they would be effective only from the dates they were
issued.
c. Accordingly, the Government has approved
implementation of TPS for 2005-06 as per the Judgment of the Honourable Supreme
Court. Notification No.06/2015-2020 dated 8th May, 2017 has been issued in this
regard. Accordingly, all RAs are directed to re-examine all the eligible
claims/applications pending for TPS 2005-06 for issue of the balance
claim/recovery of wrong claims as applicable after ensuring due diligence and
ensuring genuineness of the exports.
d. Following instructions are to be complied with by all
RAs:
i. Zonal Committees: Zonal Committees shall be constituted
comprising Zonal Additional DGFT, Officials from the Regional Customs Authority,
Excise Authority, DRI, Income Tax Authority and any such other agencies as
deemed necessary by the Zonal Committees. All claims/applications shall be
compulsorily placed before the concerned Zonal Committees. Any
claims/applications pending in any other Regional offices shall be placed before
the respective Zonal Committees for appropriate decision and the Head of such RA
shall be a member for such cases in the respective Zonal Committees.
ll.
Due Diligence: The concerned Zonal Committee shall thoroughly scrutinize the
claims to ascertain genuineness of exports by exercising due diligence. While
processing such claims, the Committee will thoroughly check the claims having
high growth in terms of percentage and/or value and against irregularities if
any more specifically on the exclusion made in the relevant Policy Provisions
before the issuance of the Notification No. 48 dated 20.02.2006 and Notification
No.8 dated 12.06.2006.
III. Irregular cases: No legal right shall
accrue to the exporters who misused Target Plus Scheme (TPS) as established in
the investigations of Revenue Department (DRI/Customs) and no benefit shall be
extended to such exports.
IV. Product Exclusion: The
Notification No 48 dated 20.02.2006 shall be given effect from 20.02.2006 and
accordingly, for exports made on or after 20.02.2006, TPS shall not be allowed
in respect of the export products excluded under TPS vide the said notification.
V.
TPS Rate:
The rate of entitlement to be considered shall be as per the Original
provisions of the TPS existing before issuance of the Notification No.8 dated
12.06.2006. The Notification No.20 dated 13.07.2006, wherein the eligibility
criteria for TPS was reduced from ₹ 10 crore to ₹ 5 crore w.e.f 01.04.2005,
shall not be given effect. If there are any cases wherein claims have been
allowed to exporters as per the Notification No.20 dated 13.07.2006, recoveries
shall be made in respect of such claims.
VI.
Application
& Late Cut: The date of initial application shall be considered as the date of
application for determining the applicable late cut.
VIl.
Validity of fresh TPS Scrips: The validity period of such additional/fresh TPS
scrips shall be 24 months (as per the provisions of the original TPS 2005-06)
from the date of issue. The Duty Credit scrips can be used for import of goods
as per Para 3.7.6 of FTP 2005-06 read with Para 3.2.5 of HBP, 2005-06.
VIll. Pending dues
to Government: In order to ensure that existing government dues, if any, are
recovered from the eligible entities for which claims are now being settled
based on the judgment of the Hon’ble Supreme Court, a certificate from these
entities must be taken that no dues are pending to government/departments
including DGFT. If any due is there, then it must be paid before release of the
claim under TPS. In case of large claims, this certificate may be sent to the
concerned Departments/Ministries for time-bound comments. In case of DGFT, any
dues towards recoveries on account of any of DGFT’s Schemes including DFCE shall
have to be adjusted first before issue of TPS scrips.
For the purpose of
submitting the Certificate under this sub-paragraph, if the firm is a Limited
Company, the Certificate shall be signed by the Managing Director or two
Directors of the Company, along with the seal of the Company. Alternatively the
Certificate shall be signed by a senior executive of the Company of the rank of
General Manager and one of the Directors of the Company who have been authorized
by the board of Directors for this purpose, along with the seal of the Company.
In such cases, Certificate shall be countersigned by the Company Secretary. In
case of a Partnership/Proprietorship firm, the Certificate shall be signed by
all the Partners/ Proprietor respectively. In all cases, the certificate shall
be countersigned by the statutory auditor of the company/ firm.
e. Reporting: All Zonal heads shall submit fortnightly progress
report of the status of implementation of the decision of the Honourable Supreme
Court including RA wise name of the exporters and the value of claims processed/
recoveries made. Any difficulties in the implementation of the orders dated
27.10.2015 of the Honourable Supreme Court and the above instructions shall be
brought to the notice of this Directorate.
f. This issues with approval
of Competent Authority.
Lokesh.HD
Joint Director General of Foreign Trade
[F. No:
011/94/180/893/AM08/PC-3(part)]
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