In the new Foreign Trade Policy (2004-09) , announced by the Hon’ble Union Minister of Commerce & Industry on 31st August, 2004, the handloom sector has been identified as a “Thrust sector” with a view to double our percentage share of global trade within next five years and expand employment opportunities in semi urban and rural areas and in one of the policy measures, the Ministry of Finance had issued a Notification No. 89/2004-Customs dated 10-9-04, including Handloom Export Promotion Council and making registration with HEPC as a condition for manufacturers of textile garments for imports of trimmings and embellishments duty free. Since Made-ups constitute the major chunk of exports in handloom sector, we have requested the Ministry to make necessary amendment in the Notification to include handloom made-ups also along with garments. Consequently, In the new Foreign Trade Policy announced on 23rd August, 2010 Handloom Made-ups have been included for the benefit of Duty free import of specified trimmings, embellishments etc @ 5% of FOB value of exports. Accordingly, The Ministry of Finance has issued a Notification vide Customs Notification No. 91/2010 dated 6-9-2010 after making necessary amendments. As such, Manufacturer-exporters of handloom made-ups are eligible for Duty free import entitlement of the following trimmings and embellishments @5% of FOB value of exports during previous financial year i.e. 1st April 2010 to 31st March, 2011.
Zipper, Fastner and slider
Lace
Velcro tape
Elastic tape, curtain tape and edgeband tape
Curtain hook
Button and eyelet
Tassel
Bead and sequin
Insert
Sample fabric of total length upto 500 metres
For this purpose, HEPC is authorized to issue Export Performance Certificate/Import Certificate to the applicant manufacturer-exporter. The procedure for submitting application for issuance of Export Performance Certificate (only against exports of handloom made-ups) for the purpose of importing the above mentioned specified trimmings and embellishments along with prescribed proformae in this regard are attached herewith and member exporters are requested to strictly adhere to the guidelines while making the application to HEPC for issuance of Export Performance Certificate/Import Certificate.
Thanking you,
Yours faithfully,
(Beela Rajesh)
Executive Director
Sub: procedure for submitting application for issuance of export performance certificate (only against exports of handloom made-ups) for the purpose of importing (a) Zipper, Fastner and slider, (b) Lace (c) Velcro tape, (d) Elastic tape, curtain tape and edge band tape (e) Curtain hook (f) Button and eyelet (g) Tassel (h) Bead and sequin (i) Sample fabric (of total length upto 500 metres) under Customs Notification No.91/2010 dated 06-09-2010.
Applications are invited from eligible Manufacturer-exporters of Handloom Made ups for issuance of Export Performance Certificate by the Handloom Export Promotion Council (HEPC) for the purpose of importing eligible item/s (as specified in Customs Notification No. 91/2010 dated 6-9-2010) for use in the manufacture and export of Handloom Made-ups, by them.
The applicant Manufacturer-exporters of handloom Made-ups are required to give correct and complete information strictly in the prescribed formats duly supported by Certification from Chartered Accountant and self-certified copies of Bank Certificate of Exports and Realisation Form towards realization of export proceeds equivalent to the amount of export performance claimed in the prescribed proformae of applications which are attached herewith.
Applications will be received by HEPC only from the Manufacturer-exporters of handloom made-ups who are registered with the Handloom Export Promotion Council. The applications may be addressed to:-
Application for issuance of Export Performance Certificate (format given at Annexure-I) should contain the details of exports of only handloom made-ups exported and proceeds realized (FOB value) in Indian Rupees during the (preceding) financial year 2010-11 (i.e. from 1st April’2010 to 31st March’2011)
Details of shipment/s of free samples should not be included in the Statement of Exports as they are not considered as exports for this purpose. Exporters should therefore furnish the details physical/actual exports and proceeds realized.
Applicant Manufacturer-exporters of Handloom Made ups are required to give correct and complete information strictly in the prescribed formats duly supported by Certification from Chartered Accountant and self-certified copies of Bank Certificate of Exports and Realisation (Appendix-22A, Form No.1) towards realization of export proceeds equivalent to the amount of export performance claimed.
A certificate on the Letter Head of the Exporter to the effect that the export performance claimed and all the shipping Bills referred in the statement of exports pertain to Handloom Made ups only should also be submitted.
The Council reserves the right to call for any other documents/information that may be relevant and required for this purpose.
Applications should be accompanied by a Multicity Cheque or Pay Order/Demand Draft in favour of “Handloom Export Promotion Council”, payable at Chennai, for an amount at the rates given below towards Application fees/Service charges (which are non refundable).
Sl. No.
Details
Fee
1
Export performance upto Rs. 1 crore
Rs. 2,500/-
2.
Export performance between Rs. 1 crore to Rs. 10 crore
Rs. 5,000/-
3
Export performance of Rs. 10 crore and above
Rs. 10,000/-
The Council will verify the details received from exporters and issue the Export Performance Certificate.
For import of the permissible item/s, exporter should apply to the Council (Head Office at Chennai) in the prescribed format (given at Annexure-II) on the Letter Head of the Exporter and submit the original Export Performance Certificate well in advance.
The Council after verifying the details will issue the Import Certificate which should be submitted to the Customs authorities at the time of clearance of import consignment.
For every import clearance, the exporter shall obtain an Import Certificate from the Council by submitting a separate application each time in the format (given at Annexure-II).
The details imports against the Import Certificates will be debited to the Export Performance Certificate (Original) based on the Bill of Entry submitted by the exporter along with the application for Import Certificate.
As an export promotion measure and to accommodate eligible exporters for smooth operation of the scheme for importing of permissible embellishments and above Notification, it has been decided to issue Import Certificate/s as per the actual requirement of the exporters. The scheme would be operative as follows:
Exporter can apply for issuance of Import Certificate on the basis of provisional Bill of Entry also. For each Import Certificate, a separate application should be submitted to Head Office of HEPC.
Exporter may obtain any number of Import Certificates which will be debited to Export Performance Certificate, as per existing procedure.
Exporter shall submit a copy of final Bill of Entry issued by Customs within 30 (Thirty) days from the clearance of the goods from the Customs to Head Office of HEPC.
No add back would however be permitted in Export Performance Certificate for the Import Certificate/s once issued for those Bills of Entry which were provisionally prepared and submitted to HEPC for obtaining Import Certificate/s.
As per the clarification issued by the Joint Secretary (Drawback), duty free clearance of embellishments from Private Bonded Warehouse is permitted. Exporters, therefore, while seeking imports from the Private Bonded Warehouse should carefully fill Serial No. 9 of application for issuance of Import Certificate (Annexure-II), at the time of applying for Import Certificate.
The last date for receipt of the applications for issuance of Export Performance Certificate (EPC) for the financial year 2010-2011 is 31-1-2012.
Applications received after the last date (i.e. 31-1-2012) will however be accepted along with late fees of Rs. 1000/- per application in addition to the normal fees/charges, as prescribed above.
Export Performance Certificate issued for the year 2010-11 in unutilized may be surrendered to the Council after 1-4-2012, for cancellation.
The Hon'ble Union Minister of Finance, Govt. of India, presented the Union Budget for the year 2011-12 on 28th February, 2011. Some of the highlights/Salient features of the proposals, which have a bearing in manufacture and exports of textiles in general, and handlooms in particular are as follows:
CUSTOMS
The basic customs duty rates of 2%, 2.5% and 3% are being unified at the median rate of 2.5%.
All clearances from SEZ into DTA are being exempted from SAD provided they are not exempt from the levy of VAT/Sales Tax.
Basic customs duty is being reduced on raw silk (not thrown) of all grades from 30% to 5%.
Cotton waste is being fully exempted from basic customs duty.
Basic customs duty on Poly Tetra Methylene Ether Glycol (PTMEG) and Diphenylmethane 4, 4-diisocyanate (MDI) is being reduced from 7.5% to 5% subject to actual user condition.
Basic customs duty is being reduced from 5% to 2.5% on Acrylonitrile.
Basic customs duty is being reduced from 7.5% to 5% on Sodium Polyacrylate.
Basic customs duty is being reduced from 10% to 7.5% on Caprolactum.
Basic customs duty is being reduced from 10% to 7.5% on Nylon chips, fibre & yarn.
Basic customs duty is being reduced from 5% to 2.5% on rayon grade wood pulp.
The list of specified goods, allowed to be imported duty free for use in the manufacture of textile and leather garments, is being expanded by including anti-theft devices like labels, tags and sensors therein.
Description of some items is being changed in the list of items that are allowed to be imported duty free for manufacture of textile or leather garments and other leather goods for export.
Benefit of duty free import on trimmings, embellishments, components etc., for manufacture of leather goods, footwear and textile garments is being extended to merchant exporters subject to certain conditions.
Works of arts and antiquities are exempted from customs duty for exhibition or display in private art galleries or similar premises that are open to general public.
CENTRAL EXCISE
The concessional rate of excise duty of 4% is being increased to 5%. Accordingly, items such as textile intermediates & textile goods would now be subject to the enhanced rate of duty of 5%.
An excise duty of 1% without Cenvat credit facility is being imposed on about 130 specified items, which were hitherto either fully exempt from excise duty or chargeable to nil rate of excise duty. General SSI exemption would be available to all products covered under this new levy.
A mandatory excise duty of 10% is being imposed on readymade garments and textile made ups bearing a brand name or sold under a brand name. General SSI scheme is also being extended to readymade garments and other textile made up articles. Duty shall be charged on the tariff value @60% of their retail sale price.
An excise duty of 5% is being imposed on automatic looms and projectile looms.
Excise duty is being reduced from 10% to 5% on parts of specified textile machinery.
Full exemption from excise duty is being extended to specified part of sewing machines (other than those with in-built motors)
A tariff rate of excise duty of 10% is being prescribed for jute yarn while it is being simultaneously exempted from excise duty.
SERVICE TAX
Exemption is being provided to services provided by an organizer of business exhibitions in relation to business exhibitions held outside India.
Value of air freight included in the assessable value of goods for charging customs duties is being excluded from taxable value for the purpose of levy of service tax under the “Transport of goods by air” service.
Services related to transportation of goods by road, rail or air when both the origin and the destination are located outside India is being exempted from service tax.
Exemption from service tax on the membership fees under ‘Club or association service’ is being given to the associations or chambers representing industry or commerce for the period from 16-06-2005 to 31-03-2008.
Micro, Small and Medium Enterprises
Rs. 5,000/- crore to be provided to SIDBI for refinancing incremental lending by banks to these enterprises.
Rs. 3,000/- crore to be provided to NABARD to provide support to handloom weaver co-operative societies which have become financially unviable due to non-repayment of debt by handloom weavers facing economic stress.
Exports
Self assessment to be introduced in Customs to modernize the customs administration.
Proposal to introduce scheme for refund of taxes paid on services used for export of goods.
Thanking You,
Yours faithfully,
(Beela Rajesh)
Executive Director
HEPC/EF/DBK/10/
20th September 2010
To all Members/RTEs
Dear Sir,
The Ministry has announced the revised All Industry Rates of Duty Drawback vide Notification No. 84/2010-Cus.(N.T.) dated 17-9-2010. The rates of drawback have been made effective from 20-9-2010. The Notification may please be downloaded from CBEC website www.cbec.gov.in and perused for details. However the details of the Drawback Schedule pertaining to handloom industry is furnished below:
Tariff Item
Description of goods
Unit
Drawback when Cenvat facility has not been availed
Drawback when Cenvat facility has been availed
Drawback rate
Drawback cap per unit in Rs.
Drawback rate
Drawback cap per unit in Rs.
5208
Woven fabrics of cotton containing 85 % or more by weight of cotton, weighing not more than 200 g/m2
520801
Grey
Kg
3.7%
12
1%
520802
Dyed
Kg
4.2%
14
1%
520803
Lungies
Kg
4.2%
14
1%
520804
Real Madras Handkerchiefs
Kg
3.7%
12
1%
5209
Woven fabrics of cotton containing 85 % or more by weight of cotton, weighing more than 200 g/m2
520901
Grey
Kg
3.7%
12
1%
520902
Dyed
Kg
4.2%
14
1%
520903
Lungies
Kg
4.2%
14
1%
520904
Real Madras Handkerchiefs
Kg
4.2%
14
1%
5210
Woven fabrics of cotton containing 85 % or more by weight of cotton, mixed mainly or solely with man-made fibres, weighing not more than 200 g/m2
Kg
521001
Grey
Kg
4.2%
15
1%
521002
Dyed
Kg
4.7%
18.5
1%
5211
Woven fabrics of cotton containing 85 % or more by weight of cotton, mixed mainly or solely with man-made fibres, weighing more than 200 g/m2
521101
Grey
Kg
4.2%
15
1%
521102
Dyed
Kg
4.7%
18.5
1%
5212
Other Woven fabrics of cotton
521201
Grey
Kg
3.7%
12
1%
521202
Dyed
Kg
4.2%
14
1%
5702
Carpets and other textile floor coverings, woven, not tufted or flocked, whether or not made up, including "Kalem", "Schumacks", "Karamanie" and similar hand-woven rugs
570201
Of wool or fine animal hair
Sqm
10%
300
3%
90
570202
Of silk
Sqm
14.5%
982
8%
542
570203
Of man-made fibres
Sqm
9.1%
171
2.5%
47
570204
Of Cotton
Kg
8.9%
29
3.7%
12
570205
Of Jute
3.5%
570206
Of Coir
3.5%
570299
Others
2.5%
1%
570501
Cotton Durries/Cotton Rugs (including Chindi Durries/Cotton Chenille Durries/Rag Rug Durries/Printed Durries/Druggets/Mats and Mattings including Bath Mats, where cotton predominates by weight
Kg
8.9%
29
3.7%
12
570502
Woolen Durries/Woolen Rugs (including Chindi Durries/Woolen Chenile Durries/Rag Rug Durries/Printed Durries/Druggets/Mats and Mattings including Bath Mats, where wool predominates by weight.
Kg
8.9%
29
3.7%
12
570503
Other
2.5%
1%
5801
Woven pile fabrics and Chenille fabrics, other than fabrics of heading 5802 or 5806
580101
Of Wool
Kg
4.8%
19.5
3.1%
12.6
580102
Of Man-made fibres
Kg
7.4%
24
1%
580103
Of Cotton and others
Kg
3.5%
10
1%
5802
Terry toweling and similar woven terry fabrics, other narrow fabrics of heading 5806; tufted textile fabrics, other than products of heading 5703
Kg
4.8%
25.2
1%
5803
Guaze, othr than narrow fabrics of heading 5806
Kg
4.8%
11.4
1%
5805
Hand-woven tapestries of the type gobelins, flanders, aubusson, beauvals and the like, and needle-worked tapestries (for example,petit point, cross-stitch), whether or not made up.
Kg
4.8%
11.4
1%
5806
Narrow woven fabrics other than goods of heading 5807; narrow fabrics consisting of warp without weft assembled by means of an adhesive (bolducs)
580601
Of Man-made fibres
Kg
7.4%
17.4
1%
580602
Of Cotton and others
Kg
3.6%
8.7
1%
5811
Quilted textile products in the piece, composed of one or more layers of textile materials assembled with padding by stitching or otherwise, other than embroidery of heading 5810
Kg
4.8%
11.4
1%
6213
Handkerchiefs
621301
Of cotton
Kg
7.5%
60
2.2%
17.3
621302
Of blend containing cotton and man made fibre
Kg
8.6%
65
2.2%
16.4
6214
Shawls, Scarves, mufflers, mantillas, veils and the like
62140101
Shawls, of Cotton
Piece
7.5%
37
2.2%
10.8
62140102
Shawls, Of Blend containing cotton and Man made fibre
Piece
8.6%
40
2.2%
10.2
62140201
Scarves and mufflers, of Cotton
Piece
7.5%
30
2.2%
8.6
62140202
Scarves and mufflers, Of blend containing cotton and Man made fibre
Piece
8.6%
32
2.2%
8.2
5208
Woven fabrics of cotton containing 85 % or more by weight of cotton, weighing not more than 200 g/m2
62140301
Others, of cotton
kg
7.5%
60
2.2%
17.3
62140302
Others, Of Blend containing cotton and man made fibre
Kg
8.6%
65
2.2%
16.4
6216
Gloves, mittens and mitts
621601
Of cotton
Kg
7.5%
60
2.2%
17.3
621602
Of blend containing cotton and man made fibre
Kg
8.6%
65
2.2%
16.4
6301
Blankets and traveling rugs
Kg
6.5%
23
1%
6302
Bedlinen, table linen, toilet linen and kitchen linen
630201
Of Cotton
Kg.
7.1%
60
1%
630202
Of blend containing cotton and man made fibre
Kg
7.9%
65
1%
630203
Of Man made fibres
Kg
9%
66
1%
630204
Of silk (other than containing Noil silk)
Kg
10%
310
3.8%
118
630205
Of Noil Silk
Kg
10%
105
3.1%
33
630206
Of wool
Kg
7.1%
66
3%
28
630207
Of others
Kg
7.1%
53
1%
6303
Curtains (including drapes) and interior blinds; curtain or bed valances
630301
Of Cotton
Kg
7.1%
60
1%
630302
Of Blend containing cotton and man made fibre
Kg
7.9%
65
1%
630303
Of Man made fibres
Kg
9%
66
1%
630304
Of Silk (other than containing Noil silk)
Kg
10%
310
3.8%
118
630305
Of Noil silk
Kg
10%
105
3.1%
33
630306
Of Wool
Kg
7.1%
66
3%
28
630307
Of others
Kg
7.1%
53
1%
6304
Other furnishing articles, excluding those of heading 9404
630401
Of cotton
Kg
7.1%
60
1%
630402
Of Blend containing cotton and man made fibre
Kg
7.9%
65
1%
630403
Of Man made fibres
Kg
9%
66
1%
630404
Of Silk (Other than containing Noil silk)
Kg
10%
170
3.8%
65
630405
Of Noil silk
Kg
10%
55
3.1%
17
630406
Of Wool
Kg
7.1%
45
3%
19
630407
Of others
Kg
7.1%
39
1%
Thanking you,
Yours faithfully,,
(Beela Rajesh)
Executive Director
HEPC/EF/FTP/09-10/
23rd August 2010
To all Members/RTEs
Dear Sirs,
The Honble Union Ministry of Commerce & Industry, Govt. of India, has announced the Foreign Trade Policy (2009-14) on 23rd August, 2010. The highlights of the Foreign Trade Policy pertaining to export sector in general and handloom sector in particular are furnished below::
Duty free import of specified trimmings, embellishments etc. shall be available on Handloom made-ups exports @ 5% of FOB value of exports.
Additional 2% bonus benefit will be available over and above the existing benefit of 2% of FOB value of exports under Focus Product Scheme.
Duty Entitlement Passbook (DEPB) Scheme has been extended beyond 31-12-2010 till 30-06-2011.
Interest subvention of 2% for pre-shipment credit for export of handlooms will be allowed till 31-3-2011.
To upgrade their technology, Status Holders were eligible for 1% Status Holder Incentive Scheme (SHIS) from August 2009 onwards till 31-3-2011. Now, this facility has been extended one more year for 2011-12 exports.
To reduce the transaction cost and time and to remove redundancy of repeated submissions of RCMC, an 'e-RCMC' initiative has been commenced. Under this, the Export Promotion Councils would upload the RCMC data of their members on DGFT's website only once, thus reducing the procedural burden of repeated submissions and associated cost and time.
In order to provide wider choice to the users and enlarge access for online filing, additional licenced certifying authorities for digital signatures and banks for electronic fund transfer (EFT) operations has been included in the gamut of EDI operations.
Additional Towns of Export Excellence (TEEs) announced iz. Barmer (Rajasthan) for Handicrafts; Bhiwandi (Maharashtra) for Texiles; and Agra (Uttar Pradesh) for Leather Products.
Zero duty EPCG scheme, introduced in August 2009 and valid for only two years upto 31-3-2011, has been extended by one more year till 31-3-2012.
Exporters shall now have the flexibility to get a high value EPCG authorization by filing their EPCG application on Annual basis, without the need to file the application for individual capital goods from time to time.
To impart flexibility to exporters and to facilitate smooth clearance of consignments, a Single customs notification for the two variants of Advance Authorization scheme namely advance authorization for physical exports & deemed exports shall be issued in order to eliminate the ambiguity in clubbing of such exports.
Chartered Engineer Certificate for Advance Authorization on self declared basis, has been dispensed with.
Thanking You,
Yours faithfully,
(Beela Rajesh)
Executive Director
HIGHLIGHTS OF TRADE FACILITATION MEASURES
(SUPPLEMENT TO FOREIGN TRADE POLICY 2009-2014)
HEPC/EF/FTP/09-10/ 27th August, 2009
To all members
Dear Sir,
The Hon’ble Union Ministry of Commerce & Industry, Govt. of India, has announced the Foreign Trade Policy (2009-14) on 27th August, 2009. The highlights of the Foreign Trade Policy pertaining to export sector in general and handloom sector in particular are furnished below:
I. HIGHER SUPPORT FOR MARKET AND PRODUCT DIVERSIFICATION
1. Incentive schemes under Chapter 3 have been expanded by way of addition of new products and markets.
2. 26 new markets have been added under Focus Market Scheme. These include 16 new markets in Latin America and 10 in Asia-Oceania.
3. The incentive available under Focus Market Scheme (FMS) has been raised from 2.5% to 3%.
4. The incentive available under Focus Product Scheme (FPS) has been raised from 1.25% to 2%.
5. A large number of products from various sectors have been included for benefits under FPS. These include, Engineering products (agricultural machinery, parts of trailers, sewing machines, hand tools, garden tools, musical instruments, clocks and watches, railway locomotives etc.), Plastic (value added products), Jute and Sisal products, Technical Textiles, Green Technology products (wind mills, wind turbines, electric operated vehicles etc.), Project goods, vegetable textiles and certain Electronic items.
6. Market Linked Focus Product Scheme (MLFPS) has been greatly expanded by inclusion of products classified under as many as 153 ITC(HS) Codes at 4 digit level. Some major products include; Pharmaceuticals, Synthetic textile fabrics, value added rubber products, value added plastic goods, textile madeups, knitted and crocheted fabrics, glass products, certain iron and steel products and certain articles of aluminium among others. Benefits to these products will be provided, if exports are made to 13 identified markets (Algeria, Egypt, Kenya, Nigeria, South Africa, Tanzania, Brazil, Mexico, Ukraine, Vietnam, Cambodia, Australia and New Zealand).
7. A common simplified application form has been introduced for taking benefits under FPS, FMS, MLFPS and VKGUY.
8. Higher allocation for Market Development Assistance (MDA) and Market Access Initiative (MAI) schemes is being provided.
II. TECHNOLOGICAL UPGRADATION
To aid technological upgradation of our export sector, EPCG Scheme at Zero Duty has been introduced. This Scheme will be available for engineering & electronic products, basic chemicals & pharmaceuticals, apparels & textiles, plastics, handicrafts, chemicals & allied products and leather & leather products (subject to exclusions of current beneficiaries under Technological Upgradation Fund Schemes (TUFS), administered by Ministry of Textiles and beneficiaries of Status Holder Incentive Scheme in that particular year). The scheme shall be in operation till 31.3.2011.
III. EPCG SCHEME RELAXATIONS
1. To increase the life of existing plant and machinery, export obligation on import of spares, moulds etc. under EPCG Scheme has been reduced to 50% of the normal specific export obligation.
2. Taking into account the decline in exports, the facility of Re-fixation of Annual Average Export Obligation for a particular financial year in which there is decline in exports from the country, has been extended for the 5 year Policy period 2009-14.
IV. SUPPORT FOR GREEN PRODUCTS AND PRODUCTS FROM NORTH EAST
Focus Product Scheme benefit extended for export of ‘green products’; and for exports of some products originating from the North East.
V. STATUS HOLDERS
1. To accelerate exports and encourage technological upgradation, additional Duty Credit Scrips shall be given to Status Holders @ 1% of the FOB value of past exports. The duty credit scrips can be used for procurement of capital goods with Actual User condition. This facility shall be available for sectors of lether (excluding finished leather), textiles and jute, handicrafts, engineering (excluding Iron & steel & non-ferrous metals in primary and intermediate form, automobiles & two wheelers, nuclear reactors & parts, and ships, boats and floating structures), plastics and basic chemicals (excluding pharma products) [subject to exclusions of current beneficiaries under Technological Upgradation Fund Schemes (TUFS)]. This facility shall be available upto 31.3.2011.
2. Transferability for the Duty Credit scrips being issued to Status Holders under paragraph 3.8.6 of FTP under VKGUY Scheme has been permitted. This is subject to the condition that transfer would be only to Status Holders and Scrips would be utilized for the procurement of Cold Chain equipment(s) only.
VI. STABILITY/CONTINUITY OF THE FOREIGH TRADE POLICY
1. To impart stability to the Policy regime, Duty Entitlement Passbook (DEPB) Scheme is extended beyond 31-12-2009 till 31.12.2010.
2. Interest subvention of 2% for pre-shipment credit for 7 specified sectors has been extended till 31.3.2010 in the Budget 2009-10.
3. Income Tax exemption to 100% EOUs and to STPI units under Section 10B and 10A of Income Tax Act, has been extended for the financial year 2010-11 in the Budget 2009-10.
VII. HANDLOOM SECTOR
To simplify claims under FPS, requirement of ‘Handloom Mark’ for availing benefits under FPS has been removed.
VIII. EOUs
1. EOUs have been allowed to sell products manufactured by them in DTA upto a limit of 90% instead of existing 75%, without changing the criteria of ‘similar goods’, within the overall entitlement of 50% for DTA sale.
2. EOUs will now be allowed to procure finished goods for consolidation along with their manufactured goods, subject to certain safeguards.
3. During this period of downturn, Board of Approvals (BOA) to consider, extension of block period by one year for calculation of Net Foreign Exchange earning of EOUs.
4. EOUs will now be allowed CENVAT Credit facility for the component of SAD and Education Cess on DTA sale.
VIII. Thrust to Value Added Manufacturing
1. To encourage Value Added Manufactured export, a minimum 15% value addition on imported inputs under Advance Authorization Scheme has now been prescribed.
2. Coverage of Project Exports and a large number of manufactured goods under FPS and MLFPS.
IX. DEPB
DEPB rate shall also include factoring of custom duty component on fuel where fuel is allowed as a consumable in Standard Input-Output Norms.
X. FLEXIBILITY PROVIDED TO EXPORTERS
1. Payment of customs duty for Export Obligation (EO) shortfall under Advance Authorisation / DFIA / EPCG Authorisation has been allowed by way of debit of Duty Credit scrips. Earlier the payment was allowed in cash only.
2. Import of restricted items, as replenishment, shall now be allowed against transferred DFIAs, in line with the erstwhile DFRC scheme.
3. Transit loss claims received from private approved insurance companies in India will now be allowed for the purpose of EO fulfillment under Export Promotion schemes. At present, the facility has been limited to public sector general insurance companies only.
XI. WAIVER OF INCENTIVES RECOVERY, ON RBI SPECIFIC WRITE OFF
In cases, where RBI specifically writes off the export proceeds realization, the incentives under the FTP shall now not be recovered from the exporters subject to certain conditions.
XII. SIMPLIFICATION OF PROCEDURES
1. To facilitate duty free import of samples by exporters, number of samples/pieces has been increased from the existing 15 to 50. Customs clearance of such samples shall be based on declarations given by the importers with regard to the limit of value and quantity of samples.
2. To allow exemption for up to two stages from payment of excise duty in lieu of refund, in case of supply to an advance authorisation holder (against invalidation letter) by the domestic intermediate manufacturer. It would allow exemption for supplies made to a manufacturer, if such manufacturer in turn supplies the products to an ultimate exporter. At present, exemption is allowed upto one stage only.
3. Greater flexibility has been permitted to allow conversion of Shipping Bills from one Export Promotion scheme to other scheme. Customs shall now permit this conversion within three months, instead of the present limited period of only one month.
4. To reduce transaction costs, dispatch of imported goods directly from the Port to the site has been allowed under Advance Authorisation scheme for deemed supplies. At present, the duty free imported goods could be taken only to the manufacturing unit of the authorisation holder or its supporting manufacturer.
5. Disposal of manufacturing wastes / scrap will now be allowed after payment of applicable excise duty, even before fulfillment of export obligation under Advance Authorisation and EPCG Scheme.
XIII. REDUCTION OF TRANSACTION COSTS
1. No fee shall now be charged for grant of incentives under the Schemes in Chapter 3 of FTP. Further, for all other Authorisations/ licence applications, maximum applicable fee is being reduced to Rs. 100,000 from the existing Rs 1,50,000 (for manual applications) and Rs. 50,000 from the existing Rs.75,000 (for EDI applications).
2. To further EDI initiatives, Export Promotion Councils/ Commodity Boards have been advised to issue RCMC through a web based online system. It is expected that issuance of RCMC would become EDI enabled before the end of 2009.
3. Electronic Message Exchange between Customs and DGFT in respect of incentive schemes under Chapter 3 will become operational by 31.12.2009. This will obviate the need for verification of scrips by Customs facilitating faster clearances.
4. For EDI ports, with effect from December ’09, double verification of shipping bills by customs for any of the DGFT schemes shall be dispensed with.
5. In cases, where the earlier authorization has been cancelled and a new authorization has been issued in lieu of the earlier authorization, application fee paid already for the cancelled authorisation will now be adjusted against the application fee for the new authorisation subject to payment of minimum fee of Rs. 200.
6. An Inter Ministerial Committee will be formed to redress/ resolve problems/issues of exporters.
7. An updated compilation of Standard Input Output Norms (SION) and ITC (HS) Classification of Export and Import Items has been published.
XIV. DIRECTORATE OF TRADE REMEDY MEASURES
To enable support to Indian industry and exporters, especially the MSMEs, in availing their rights through trade remedy instruments, a Directorate of Trade Remedy Measures shall be set up.
Thanking you,
Yours faithfully,
(Beela Rajesh)
Executive Director
HEPC/EF/UB-2010-11/2009-10
1st
March 2010
Dear Members
CIRCULAR
Sub: Key Features of Union Budget 2010-2011.
The Hon'ble Union Minster of Finance, Mr. Pranab Mukherjee presented the Union Budget for the year 2010-11 on 26/02/2010.
We are giving below the key features of the Budget 2010-11 that directly and indirectly impact the Export sector and the Textile and Handloom industry for your kind perusal.
Government would implement the Direct Tax Code ( DTC) from April 1, 2011.
Efforts are on by the Government to introduce Goods and Services Tax (GST) by April, 2011.
There is no change in the overall rate structure of basic customs duty. The peak rate of 10% and the lower rate slabs are being maintained.
The standard rate of excise duty (CENVAT) for non-petroleum goods has been increased from 8% to 10%.
Government to set up an apex level Financial Stability and Development Council with a view to strengthen and institutionalise the mechanism for maintaining financial stability. This Council would monitor macro-prudential supervision of the economy, including the functioning of large financial conglomerates, and address interregulatory coordination issues.
Extension of existing interest subvention of 2 per cent for one more year for exports
covering handicrafts, carpets, handlooms and small and medium enterprises.
One-time grant of Rs.200 crore to the Government of Tamil Nadu towards the cost of
installation of a zero liquid discharge system at Tirupur to sustain knitwear industry.
Government in order to complement the dedicated freight corridor, has taken up
the Delhi-Mumbai Industrial Corridor project for integrated regional development. Preparatory activities have been completed for creation of six industrial investment nodes with eco-friendly world class infrastructure.
Micro, Small & Medium Enterprises- A High Level Council on Micro and Small Enterprises to monitor the implementation of the recommendations of High-Level Task Force constituted by Prime Minister. Allocation for this sector to be increased from Rs.1,794 crore to Rs.2,400 crore for the year 2010-11.
Unorganised Sector- National Social Security Fund for unorganised sector workers to be set up with an initial allocation of Rs.1000 crore. This fund will support schemes for weavers, toddy tappers, rickshaw pullers, bidi workers etc.
Skill development- National Skill Development Corporation has approved three projects worth about Rs 45 crore to create 10 lakh skilled manpower at the rate of one lakh per annum. An extensive skill development programme in the textile and garment sector to be launched by leveraging the strength of existing institutions and instruments of the Textile Ministry to train 30 lakh persons over 5 years.
Rate of tax on services retained at 10 per cent to pave the way forward for GST.
Thanking you,
Yours faithfully,
sd/-
(Beela Rajesh)
Executive Director
HEPC/EF/Union Budget/09/
6th
July 2009
To all Members/RTEs
Dear Sir,
The Hon'ble Union Minister of Finance, Govt. of India, presented the Union Budget for the year 2009-2010 on 6th July, 2009. Some of the highlights/Salient features of the proposals which have a bearing in manufacture and exports of textiles in general and handlooms in particular are as follows:
RESTORING EXPORT GROWTH
Adjustment assistance scheme to provide enhanced Export Credit and Guarantee
Corporation (ECGC) cover at 95 per cent to badly hit sectors extended upto
March 2010.
Allocation for Market Development Assistance Scheme enhanced to Rs.124 crore
in B.E. 2009-10.
Interest subvention of 2 per cent on pre-shipment credit for seven employment
oriented export sectors extended beyond the current deadline of September 30,
2009 to March 31, 2010.
To facilitate flow of credit at reasonable rates, Rs.4,000 crore provided as special fund out of Rural Infrastructure Development Fund (RIDF) to Small Industries Development Bank of India (SIDBI). This will incentivise Banks and State Finance Corporations (SFCs) to lend to Micro and Small Enterprises (MSEs) by refinancing 50 per cent of incremental lending to MSEs during the current financial year.
Welfare of workers in the unorganized sector
Action initiated to ensure implementation of social security schemes for occupation like weavers, fishermen and women, toddy tappers, leather and handicraft workers, plantation labour, construction labour, mine workers, bidi workers and rickshaw pullers. Necessary financial allocation will be made for these schemes.
Handloom
One handloom mega cluster each in West Bengal and Tamil Nadu and one powerloom mega cluster in Rajasthan to be set up. New mega clusters for carpets to be also set up in Srinagar (J&K) and Mirzapur (UP).
Direct Taxes
Sun-set clauses for deduction in respect of export profits under sections 10A and
10B of the Income-tax Act being extended by one more year i.e. for the financial
year 2010-11.
Fringe Benefit Tax on the value of certain fringe benefits provided by employers to
their employees to be abolished.
Indirect Taxes
Customs duties
List of specified raw materials and equipment imported by manufacturer-exporters
of leather goods, textile products and footwear industry which are fully exempt
from customs duty, subject to specified conditions, to be expanded.
Customs duty on cotton waste to be reduced from 15% to 10%.
Customs duty on wool waste to be reduced from 15% to 10%.
Central excise duties
Excise duty on manmade fibre and yarn to be increased from 4% to 8%.
The scheme of optional excise duty of 4% for pure cotton to be restored.
Excise duty for man-made and natural fibres other than pure cotton, beyond the
fibre and yarn stage, to be increased from 4% to 8% under the existing optional
scheme.
An optional excise duty exemption to be provided to tops of manmade fibre
manufactured from duty paid tow at par with tops manufactured from duty paid
staple fibre.
Suitable adjustments to be made in the rates of duty applicable to DTA clearances
of textile goods made by Export Oriented Units using indigenous raw materials/
inputs for manufacture of such goods.
Service tax
Exemption from service tax (leviable under Banking and other financial services
or under Foreign exchange broking service) being provided to inter-bank purchase
and sale of foreign currency between scheduled banks.
Two taxable services, namely, 'Transport of goods through road' and 'Commission
paid to foreign agents' to be exempted from the levy of service tax, if the exporter
is liable to pay service tax on reverse charge basis. However, present cap of 10%
on commission agency charges is retained. Thus there would be no need for the
exporter to first pay the tax and later claim refund in respect of these services.
For other services received by exporters, service tax exemption to be operated
through the existing refund mechanism based on self-certification of the documents
where such refund is below 0.25 per cent of FOB value, and certification of
documents by a Chartered Accountant for value of refund exceeding the above
limit.
Export Promotion Councils and the Federation of Indian Export Organizations
(FIEO) to be exempt from service tax on the membership and other fees collected
by them till 31st March 2010.
