The government on Tuesday extended the existing Foreign Trade Policy 2015-20, including fiscal incentives for goods' exports for one year till March 2021, amid the coronavirus outbreak and the lockdown to contain the virus spread.
The commerce ministry said that in view of the "unprecedented current situation" arising out of the COVID-19 pandemic, it has decided to continue relief under various export promotion schemes by granting extension of the existing policy by another one year.
"The existing Foreign Trade Policy 2015-20, which is valid up to March 31 this year, is extended up to March 31, 2021. Various other changes are also made extending the date of exemptions by one year and extending validity of DFIA and EPCG authorisations for import purposes," the Directorate General of Foreign Trade said in a notification.
Currently, tax benefits are provided under the Merchandise Export from India Scheme (MEIS) for goods and the Services Export from India Scheme (SEIS).
The statement said benefit under all the export promotion schemes (except SEIS) and other schemes, available as on date, will continue to be available for another 12 months.
Decision on continuation of SEIS will be taken and notified subsequently, it said.
For SEIS, the notification said services categories that are eligible to avail benefits under the scheme and the rates of reward on such services rendered with effect from April 2019, to March 31 this year will be notified separately.
For the services rendered with effect from April 1 this year, it said a decision on continuation of the scheme will be taken subsequently and notified accordingly.
However, MEIS benefits would be discontinued as rates will be fixed for products under the new scheme -- Remission of Duties and Taxes on Export Product (RoDTEP).
According to the notification, the government has also extended the time period to meet export obligations under Export Promotion Capital Goods (EPCG), advance authorisation and Duty Free Import Authorisation (DFIA).
"Exemption from payment of IGST and compensation cess on the imports made under Advance Authorisations/EPCG and by export-oriented units has been extended up to March 31, 2021. The scheme for providing transport marketing assistance on the specified agricultural products is further extended for one year," the ministry said.
It also said validity period for making imports under various duty free import authorisations (AA/DFIA/EPCG) expiring between February 1, 2020, and July 31, 2020, has been allowed automatic extension for another six months from the date of expiry, without requirement of obtaining such endorsement on these authorisations.
"Wherever the period to make export is expiring between 01.02.2020 and 31.07.2020 under various authorisations, automatic extension in the export obligation period is allowed for another six months from the date of expiry, without payment of any composition fee," it said adding that last dates for applying for various duty credit scrips (MEIS/SEIS/ROSCTL) and other authorisations have been extended.
It added that extension in time has been allowed for filing various reports and returns, among others, under various provisions of the FTP.
It said imports against advance authorisations for physical exports are exempted from Integrated Tax and Compensation Cess up to March 31 next year. It was to end on Tuesday.
The Export Promotion Capital Goods (EPCG) is an export promotion scheme under which an exporter can import certain amount of capital goods at zero duty for upgrading technology related with exports. On the other hand, advance authorisation is issued to allow duty free import of inputs, which is physically incorporated in export product. Under the Duty Free Import Authorisation (DFIA) scheme, exporters are allowed to import certain goods like sugar at zero duty.
Regarding DFIA, it said that for all these authorisations, wherein the validity for import is expiring between February 1, 2020, and July 31, 2020, the validity stands automatically extended by six months from the date of expiry.
Similarly, it said that for the EPCG scheme, in cases where the validity period for import expires during February 1, 2020, and July 31, 2020, the validity is extended by 6 months.
According to the policy, import under the EPCG scheme is subject to an export obligation equivalent to 6 times of duties, taxes and cess saved on capital goods, to be fulfilled in 6 years reckoned from date of issue of authorisation.
Further, it extended duty-free buying or procurement of goods from bonded warehouse in domestic tariff area (or domestic market) or from international exhibition held in India by export-oriented units, electronics hardware technology parks, software technology parks and bio-technology parks, by one year till March 31, 2021.
Exports during April-February this fiscal dipped by 1.5 per cent to USD 292.91 billion. Imports during the period declined by 7.30 per cent to USD 436 billion, leaving a trade deficit of USD 143.12 billion.
Commenting on the move, Federation of Indian Export Organisations (FIEO) Director General Ajay Sahai said these decisions will help exporters at a time when the global supply chain is disrupted by the coronavirus pandemic.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)