Criteria For Export Houses Recognition Relaxed Again

The government yesterday relaxed the export performance criteria for determining the status of export houses, including trading house, star trading house and super star trading house.

It also agreed to accord recognition to trading houses on a net foreign exchange (NFE) basis, an official release said.

The new EXIM policy 1997-2002 had made these criterias stringent. The relaxation has been made for the current and next fiscal year and follows the revision made on June 9, following representations from the industry to the commerce ministry.

Exporters seeking recognition for three years will have to achieve export performance as initially prescribed in the EXIM policy.

The value for recognition on NFE basis for 1997-98 would be 80 per cent of average exports made in the preceding three years or the previous year, while the criteria for 1998-99 would be 1.5 times the criteria for the current fiscal.

Certain other amendments to the EXIM policy have been made including allowing existing software technology parks and electronic hardware technology park units to convert themselves into export oriented units and vice versa. In such cases, the units will continue to remain in bond and avail the permissible concessions in duties and taxes applicable under the relevant scheme.

The policy has also spelled out the objective of the duty entitlement passbook scheme. Sources said that this has been done in view of the recent questions raised by the European Union.

As per the revised norms for the current fiscal, the average FOB value of exports made during the preceding three years should be Rs 10 crore, while the FOB value of exports in the preceding licensing year should be Rs 15 crore for export houses.

The criterion prescribes average NFE exports value during the preceding three years at Rs 8 crore and value of shipments during the preceding licensing year at Rs 12 crore.

For trading houses, the average FOB value during the last three years has been fixed at Rs 50 crore, while FOB value during the preceding licensing year has been fixed at Rs 75 crore. Similarly, the NFE criterion for the category has been fixed at Rs 40 crore and Rs 60 crore, respectively.

The norms for star trading houses have been fixed at Rs 250 crore, Rs 375 crore, Rs 200 crore and Rs 300 crore, respectively, and for super star trading houses they are at Rs 750 crore, Rs 1125 crore, Rs 600 crore and Rs 900 crore, respectively.

Export obligation for supplies under advance license has been extended to the period of duration of the execution of the project instead of 18 months as in other cases. For the purpose of calculation of forex earned on exports, the value of all licenses including the value of 2.5 times the DEPB credit earned or granted and the value of duty free gold, silver and platinum shall be deducted from the FOB value of exports made by the person.

However, the value of freely transferable SILs, EPCG licenses and the value of licenses surrendered during the validity of license shall not be deducted.