Benefit under Incremental Export Incentivisation Scheme (lEIS) - DGFT Clarifies
THE Incremental Export Incentivisation Scheme (IEIS) was introduced vide Notification No.27 dated 28.12.2012. Under the scheme, an IEC holder was entitled for duty credit scrip @ 2% on the incremental growth during the period 01.01.2013 to 31.03.2013 compared to the period from 01.01.2012 to 31.03.2012 on the FOB value of export.
Vide Notification No. 44 dated 25.09.2013 on the said IEIS Scheme, it was provided that
1. Benefit for Incremental Export Incentivisation Scheme (IEIS) for the last quarter of 2012-13 will be limited lo 25% growth or Incremental growth of Rs. 10 crores in value, whichever is less.
2. Claims in excess of this value will be subjected to greater scrutiny by Regional Authority.
On 23.09.2014, a clarification was issued by DGFT to RAs that Para (1) and (2) in Notification No. 44 dated 25.09.2013 are independent. The limiting of claim was clearly mentioned in the first sub-para of Notification which fixes the upper limit of grant of benefit. The second sub-para in the Notification only directs RAs to exercise caution while dealing with cases of incremental growth or export under the scheme. It does not entitle any applicant to higher levels of benefits under the scheme.
The Notification No.44 dated 25.09.2013 on the issue of limiting the entitlement has been challenged by many exporters in different High Courts.
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In view of the decisions of the various High Courts, the matter has been re-examined in consultation with the Department of Legal Affairs and accordingly DGFT has issued instructions for processing the cases of the IEIS claims by RAs:
(i) In supersession of clarification dated 23.09.2014, RAs may further process the cases without imposing any cap on account of the earlier stipulation or restricting growth to 25% or incremental growth of Rs.10 Crores in value, whichever is less.
(ii) RAs must, however, exercise due diligence while processing such claims by following guidelines of greater scrutiny as prescribed in Public Notice No. 28 dated 25.09.2013 to check claims having high growth % and/or value and against irregularities.
(iii) If in any case there are doubts/suspicions about the authenticity/genuineness of the increments in aspect like turn over/growth etc. the matter may be referred to investigating agencies like DRI and the case may he finalized after taking into account their report.
(iv) All these cases should be approved by Head of the Office.
(v) The above stipulations will not be a bar to the RAs in scrutinizing small value claims also, when there is prima facie case to do so.
(vi) No right is vested in favour of claimant when impropriety/fraud has been detected.
DGFT Trade Notice no. 04/2016., Dated: May 05 2016