Dgft Employs Strong-Arm Tactics

The Director-General of Foreign Trade (DGFT) has extended till October 31, the date for filing annual returns on imports and exports by holders of the Importer Exporter Code (IEC).

The move was widely expected following difficulties and complaints against the threat to de-activate the IEC if the returns were not filed by June 30 or if the IEC holder had not made any exports or exports in the previous year.

The Public Notice No. 14 (dated 25.06.03), extending the date, also gives detailed guidelines on how the returns should be filed on the DGFT website. The strange thing is that these clarifications have been issued almost three months after the provision for filing the IEC returns has been introduced.

 

In a more alarming move, the DGFT has decided to review the Duty Entitlement Passbook (DEPB) rates for all products with rates of 15 per cent or more.

The export promotion councils (EPCs) have been asked to submit fresh data supporting the claim of international prices with at least five bills of entry relating to imports of the relevant inputs, which have been made in the last one year.

In lieu of bills of entry, even the Customs data for imports can be submitted. The DGFT, who seems fond of deadlines and threats, has warned that if data is not received within two months for any product, the DEPB rate for that product will be reduced to 5 per cent.

The EPCs have in turn called for data from exporters in the revised format, annexed to the Policy Circular 8 (dated 20.06.03). The format is a slightly modified version of Appendix 10A in the Handbook of Procedures, Vol. 1.

The DGFT has asked for 25 copies of the data in revised format, for reasons best known to him. The EPCs have to consolidate the data received from the exporters and submit it to the DGFT.

The move to review the DEPB rates is significant for several reasons. DEPB is a duty credit granted on the assumption that the duty-paid imported materials have been used in the manufacture of export products.

The scheme is popular with exporters because it is like a cash subsidy for them. They can claim duty credit even if they do not use imported inputs and sell the duty credit to other importers.

However, India