Jan 1 will usher in revised HSN

This year, the demand for goods in the developed countries helped boost the exports growth despite the second wave of the Covid-19 pandemic, severe container shortages, high commodity prices, soaring ocean transportation charges, and other supply side disruptions. Towards the year-end, the container rentals and freight rates eased up somewhat as the export momentum also slowed. 

The year started with discontinuation of the Merchandise Exports from India Scheme (MEIS) and introduction of the Refund of Duties and Taxes on Export Products (RoDTEP) scheme. The Director General of Foreign Trade (DGFT) disenabled the module for filing of MEIS applications till September.

After release of allocation by the Finance Ministry, the DGFT allowed filing the applications imposing certain ceilings on entitlements and restricting the overall grant to the extent of allocations, but in December many exporters found that they could not file the applications as the allocations had run out. Hopefully, more allocations will come through and the DGFT will allow filing the MEIS applications in the next year.
 

Under the Served from India Scheme (SEIS), the rates for exports during 2019-20 were notified with certain ceilings and applications were allowed till the allocations lasted.

The government extended the Foreign Trade Policy 2015-20 (FTP), initially till end- September this year and later till the end of March next year. The principles of restriction were amended in the FTP to include exports of foodstuffs or other essential products for preventing or relieving critical shortages, imports and exports necessary for the application of standards or regulations for the classification, grading or marketing of commodities in international trade, imports of fisheries products imported in any form, imports to safeguard country’s external financial position and to ensure a level of reserves, imports to promote establishment of a particular industry and prevention of sudden increases in imports from causing serious injury to domestic producers or to relieve producers who have suffered such injury. The idea is to empower the DGFT to impose quantitative restrictions on imports. 

Pre-import registration requirements were imposed on imports of coal, semi-conductor chips and non-ferrous metals. Import duties were raised on many items and imports at lower duty rates under the preferential/free trade agreements were made more difficult. Overall the government turned more protectionist, although the government did make some progress in trade negotiations with the United Arab Emirates, the United Kingdom, and Australia, etc.

The government removed the import restrictions, lowered the import duties, and imposed export curbs on a number of items required to deal with the delta variant of Covid and ensure enough availability of medicines, injections etc. within the country. The exports of vaccines were also restricted keeping in view the need to vaccinate most adults within a short period of time. The Customs duties and tax rates under the goods and services tax (GST) laws were reduced for Covid-19 related items to ease the financial burden on the people at large. The DGFT, the Customs, and the GST administrations brought more functions and facilities under the electronic platforms making it less necessary for the trade to interface with the administrators. 

The government issued a guidance note about the changes in the Harmonized System of Nomenclature (HSN) that will come into effect from the beginning of 2022. The exporters, importers and customs brokers should keep themselves informed of the changes.  

Email: tncrajagopalan@gmail.com