Exporters should help EODC camps succeed

In a welcome move, the Direct­orate General of Foreign Trade (DGFT) has asked 11 of its Regional Offices (RO) to conduct EODC (export obligation discharge certificate) camps for two weeks starting from the 13th of next month. 

Under the advance authorisation (AA) scheme and the Export Promotion Capital Goods (EPCG) scheme, the exporters can import the inputs and capital goods required for export production without payment of duties by taking up certain export obligation (EO). The Customs usually clear the goods imported under AA and EPCG authorisations after taking bonds from the authorisation holders that they will fulfill the EO within the stipulated period. After making the necessary exports and realizing payments against the exports, the exporters submit their applications for EODC to the ROs giving the stipulated details. The ROs verify the details and upon satisfaction that the EO is completed, issue the EODCs. They update the statuses of the authorisations in the database and transmit the EODCs electronically to the Customs portal in real time. The Customs redeem the bonds on the basis of the EODCs.

Many exporters do not fulfill their EOs even after getting the EO periods extended and do not immediately regularize their cases by making payment of the duties on the imported goods but unnecessarily apply to the Policy Relaxation Committee at the DGFT Headquarters asking for more time to fulfill the EO.  They avoid regularizing their cases as long as possible as the government does not penalize them but only asks for simple interest at 15 per cent p.a. on the duty saved at the time of imports.  Even exporters who fulfill their EOs are not quick to file their EODC applications, as the outstanding bonds are not shown as contingent liabilities in their annual statements. After getting the EODCs they are not quick in getting their bonds redeemed.

Most ROs do not follow up cases where the EO period has expired but the EODC application is not received. They almost never process the EODC applications within the stipulated period of 30 days. They raise deficiencies piecemeal to ensure delays in grant of EODC. After granting EODCs they do not update the DGFT website promptly with the result, the statuses of AA/EPCG do not show as ‘closed’. Besides, EODCs are not transmitted to the Customs, who periodically issue notices in all such AA/EPCG cases that remain ‘open’ in the database.

The DGFT has repeatedly asked the exporters to upload the EODC copies where the authorisation statuses are incorrectly reflected in the database of the authorisations and asked the ROs to update the statuses after verification of the details furnished by the exporters or on the basis of their own records. Still, against a large number of authorisations in the database, the statuses do not  show ‘closed’.

The DGFT has now brought into sharp focus the urgency to deal with the EODC applications quickly and get the statuses of the authorisations updated where the EODCs are issued. The EODC camp is restricted to 11 ROs, perhaps to enable them enlist the services of the staff in other ROs for closing AA/EPCG cases. The exporters should now cooperate by submitting their EODC applications quickly, replying to any deficiencies pointed out and furnishing details of EODCs already received. That will help most ROs make their EODC camps notable successes. 

Email : tncrajagopalan@gmail.com