Commerce Minister Announces Further Export Incentives
TO enhance competitiveness for products which are labour intensive, technology intensive and value added, the Commerce Minister has announced further export incentives for more than 600 products w.e.f 01.01.2011 for sectors viz. Agriculture, Chemicals, Carpets, Engineering, electronics and plastics. The salient features of these incentives are:
Market Linked Focus Product Scheme (MLFPS): 335 New Products incentivised under MLFPS at 8 digit level, eligible for benefits @ 2% of FOB value of exports to 15 specified markets. 71 new products of Chapter 63 – Textile Made ups at 8 digit level for exports to EU (27 Countries) under MLFPS have also been incentivised @ 2% of FOB value of exports.
Focus Product Scheme (FPS): 147 products incentivised for Bonus Benefits (additional 2%) under FPS at 8 digit level, henceforth eligible for benefits @ 4% or 7% of FOB value of exports to all markets. 57 New products incentivised under FPS at 8 digit level, eligible for benefits @ 2% of FOB value of exports to all markets.
Special Focus Products: 1 product (Egg powder) incentivised as Special Focus Product at 8 digit level, eligible for benefits @ 5% of FOB value of exports to all markets.
Vishesh Krishi and Gram Udyog Yojana (VKGUY): 6 New products (Castor Oil Meal – Defatted Variety and Instant Coffee) incentivised under VKGUY at 8 digit level, eligible for benefits @ 5% of FOB value of exports to all markets.
Procedural Simplifications:
In order to make filing and issuance of IE Code hassle free with minimum human interface between the applicant and the Regional Offices, an additional facility of filing “on-line” application for obtaining IEC is being introduced.
The scope of Advance authorization for Annual Requirement is being enlarged to allow a maximum of five authorizations in a licensing year (instead of only one at present) for the product(s) falling within the same product group . This facility shall be helpful for exporters having multiple manufacturing units, located in one place or having common port of import. This will be useful for all sectors and particularly so for the sectors like Engineering, Textiles, Chemicals etc.
Technical characteristics / quality etc of certain specified items of imports shall be required to be declared at the time of clearance of import consignment and not at the time of filing application (current stipulation) for annual advance authorization to Regional authority. By this facility, the exporter shall have the flexibility to import the relevant inputs, without the need to approach the Regional authority of DGFT to amend the authorization for clearance of such consignment.
The period to fulfill the export obligation under advance authorization scheme 36 months from the date of issuance of the authorization. However this period is shorter for products being manufactured from certain duty free imported inputs, which are sensitive from domestic angle. In such cases, the period for fulfillment of export obligation is presently counted from the date of clearance of first import consignment even when a number of consignments have been cleared in different dates.
The Notifications, Public Notices and Circular about the above changes are discussed in the following paras.