Some recent rule changes

In the process of refixing the annual average export obligation under the Export Promotion Capital Goods (EPCG) Authorisations for 2010-11, the office of the Director General of Foreign Trade (DGFT) has shown some unwanted rigidity.

It has notified 357 items that showed a decline in export growth in 2010-11 over 2009-10. The reduced figures will help exporters allocate more towards discharge of specific obligations against EPCG authorisations. However, DGFT says spares for imported capital goods (whether under the EPCG scheme or otherwise) alone can be imported under the EPCG scheme. Spares for capital goods procured from indigenous sources cannot be imported under the scheme.

This needs a review. There would always be cases where domestically procured capital goods contain imported components that need to be replaced. Allowing import of such components under the EPCG scheme will help the users of such machines to save on costs.

Some other changes are for the better. To expedite customs duty payment and clearance of imported goods, e-payment facility has been made available at all major customs stations.

With effect from February 13, at the Chennai, Bangalore and Delhi Air Customs, e-payment of duty will be mandatory for all importers paying Rs 1 lakh or more per transaction, and for accredited clients under the Customs Accredited Client Programme irrespective of the duty amount. With effect from February 20, e-payment will also be compulsory at Chennai Air Cargo, JNPT Nhava-Sheva, ICD Tughlakabad and ICD Patparganj. This will reduce transaction costs.

Rigid ‘Know Your Customer’(KYC) guidelines have now been prescribed for shipping lines, shipping line agents/sub-agents, container lines, container line agents/sub-agents and freight forwarders which provide containers on lease/rent for stuffing of export cargo. They have to now collect specified documents (such as PAN number, excise registration, bank certificate, etc.) from exporters and get these verified before sending empty containers for factory stuffing.

If the containers initially booked in the name of an exporter are to be diverted to another, then the change of exporter/goods/destination should be allowed only after due verification and on the basis of documents. Importers, exporters and customs house agents have also been asked to see their names are not misused or impersonated by others.

By the existing rule, imports of certain drugs from unregistered sources are restricted. However, certain exemptions are allowed for import of approved and unapproved drugs under advance authorisation, subject to certain conditions.

The DGFT now says import of erythromycin thiocyanate for manufacturing and export of ‘Erythromycin salts’ under advance authorisation is exempt from specified conditions. In such cases, only the normal conditions of advance authorisation will apply. However, for import of erythromycin thiocyanate for veterinary medicinal use or for manufacturing of any drug under advance authorisation, the notified conditions shall apply, in addition to normal conditions for all advance authorisations.

The DGFT has also allowed an optional facility to file applications for policy relaxations online.

tncr@sify.com