As a matter of rule, the private websites seem to get quicker access to finance ministry notifications than its own staff. Somebody at the top level needs to explain. Also, the status of export consignments cleared on the 10th without collecting duty or import consignments cleared under EPCG scheme at 5 per cent duty, before the notifications were made known to the field formations, need to be clarified.

Many exporters want to know whether exports in discharge of obligations against duty free licenses will attract export duty. The answer is ‘yes'. Even the Export Oriented Units (EOU) will have to pay the duty and supplies to Special Economic Zones (SEZ) will also attract export duty.

Unlike the earlier Customs notification no.97/2004 dated September 17, 2004, the new EPCG notification repeats many conditions mentioned in the Foreign Trade Policy (FTP). The implication is that the Customs can call for evidences to independently verify whether the importer satisfies the eligibility criteria for getting 3 per cent duty dispensation. The power to independently verify eligibility gives the Customs enough opportunities to harass importers.

The new EPCG notification comes four weeks after the FTP notified 3 per cent duty on April 11, 2008. During this period, EPCG authorisations have been issued mentioning the old notification number. The Customs refuse to allow clearances at 3 per cent against such licences asking importers to get the new notification number mentioned in the authorisations. Till the issue of new EPCG notification, the Customs have been clearing the goods at 5 per cent duty even against authorisations issued after April 11, when the FTP notified 3 per cent duty under the EPCG scheme.

The notification says that the goods on which benefits of reward schemes under chapter 3 of the FTP are taken shall not be counted towards the fulfillment of the export obligation. This provision is not in conformity with the FTP.

The notification also says that that exports against only such shipping bills which mention the EPCG authorisation No. and date shall be counted for the discharge of the export obligation. This condition takes away the dispensation for condonation of procedural lapse of not mentioning the EPCG license number in the shipping bills, granted by the Director General of Foreign Trade (DGFT) through Policy Circular no. 7/(Re-2002)/2002-07 dated July 11, 2002.

Para 2.12 of the Handbook of Procedures, Vol. 1 (HB-1) says that the validity of EPCG authorisation for import of spares, refractory, catalysts and consumables shall be co-terminus with the export obligation period of the authorisation. The new Customs notification restricts the dispensation for only the spare parts for existing plant and machinery.

Notification no. 65/2008-Cus. dated May 9, 2008, amends four earlier EPCG notifications to allow proportionate reduction in maintaining annual average exports for sectors or product groups that have shown more than 5 per cent reduction in total exports during 2007-08 as compared to the year 2006-07.

tncr@sify.com