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| Advance authorisation clubbing made simpler |
| TNC Rajagopalan / Oct 24, 2011, 00:41 IST |
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While announcing the annual review of the Foreign Trade Policy on 13 October, Commerce Minister Anand Sharma said exporters have faced a lot of problems while clubbing their advance authorisations and, in most cases, they were required to approach the headquarters of the Directorate General of Foreign Trade (DGFT). This time-consuming and onerous procedure has now been simplified and the powers have been delegated to the regional authorities of the DGFT, the commerce minister said. Public Notice No. 79 dated 13 October, amends para 4.20 to 4.20.5 of the Handbook of Procedures Vol-1 (HB-1), giving effect to the announcement.
The changes in para 4.20 and 4.20.1 of the HB-1 are insignificant but the important change is that para 4.20.2 is now deleted. The earlier para, 4.20.2, said that “accountability of imports and exports shall be restricted in relation to individual categories of advance authorisations including advance authorisation for annual requirements. Effectively, this amounted to restricting clubbing individual categories of authorisations/licences. With the deletion of this Para, a hurdle has been removed and there is now enough clarity that advance authorisations for physical exports or deemed exports or annual requirements can be clubbed with each other. Of course, upon clubbing the authorisations shall be treated as a single authorisation and the inputs have to be accounted as per the input-out norms.
The earlier para 4.20.3, of HB-1, restricted clubbing in cases when there is shortfall in export obligation (EO) in one authorisation and clubbing is sought with an authorisation that is valid for imports. Also, there was a reference to composition fee as per para 4.22 of HB-1, when the provision for extension by payment of composition fee had already been deleted. Para 4.20.4 clarified that exports made beyond the extended EO period of earlier licence will not be counted for clubbing and regularisation. The revised para 4.20.3 now is categorical that “only such advance authorisations shall be clubbed which have been issued within 36 months from the date of issue of the earliest authorisation that is sought to be clubbed, whether such Authorisations are valid or not”. This provision is not only very clear but also will help regularise many cases as the maximum 36 months time-limit relates to the time gap between the date of licences that are being clubbed and not the date when exports are effected.
The revised para 4.20.4 says that “upon clubbing wherever exports are accounted beyond the EO period of the earlier authorisation, a composition fee of 0.5 per cent of the shortfall in EO shall be levied”. Again, this is a very beneficial provision because the composition fee now depends on the outstanding EO at the time of expiry of the EO period only, and not the time that elapsed between the time of expiry of EO period and the date of exports counted for clubbing and regularisation.
Para 4.20.5 says that clubbing of advance licences issued between 1.4.1992 and 31.3.1992 will be allowed. However, the exporters must carefully note that the facility will be available only till 31 March, 2012. Thereafter, no clubbing of licenses issued before 31 March, 2012 shall be allowed. No clubbing of erstwhile Value Based Advance licences shall be allowed.
The DGFT deserves all appreciation for making these changes after putting up the matter for discussions in public domain and taking feedback from the sector.
Email: tncr@sify.com
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