Trust-Based System for Exporters to Come Soon: DGFT.

CHENNAI: India will move to a 'trust-based system' to reduce the paperwork and transaction costs, a foreign trade official said.

At present, exporters are loaded with documentation and verification procedures which add up to cost of exports, while a trust based system reduces paperwork and is based on self declaration.

"The trust-based system will significantly reduce paperwork and help in quick completion of work. But the flipside is that in case of mistrust, it will attract huge penalties," Anup K Pujari, director general of foreign trade, said.

Pujari is in favour of the exporter self-declaring while filing documents, which will be certified by a chartered accountant (CA). "We are working on the system and hopefully something will come up soon. This is possible if we all work together," he told reporters on the sidelines of an interactive session organised by the Federation of Indian Export Organisations (FIEO) on Tuesday.

Ramu S Deora, president of FIEO, said for every shipment exporters are signing bonds with various departments including customs, central excise, service tax and DGFT. "Since all authorities are now on Electronic Data Interchange, they should take only one bond, which will benefit them as well as exporters," he said.

The Task Force Report on the transaction costs by the commerce ministry, is expected soon. Last year, the ministry said that the Task Force has monetised transaction costs worth $12-15 billion, which is around 7% to 10% of exports and even if a third of these are reduced, the exporters will benefit.

Pujari said he would consider leather industry's demand to extend the cluster based incentives for Ranipet in Tamil Nadu.

At present, Ambur in Tamil Nadu, Dewas in Madhya Pradesh and Kanpur and Agra in Uttar Pradesh have been declared as towns of export excellence (TEEs). The leather industry has sought the extension of the scheme to Ranipet in Tamil Nadu, Unnao in UP and Gurgaon. "If the clusters cross the threshold of export of Rs 1,000 crore, we will certainly examine the request," he said.

Source : timesofindia.indiatimes.com