TIOL-DDT 398 · the untouched capture
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<p > <font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#663399" size="3">TIOL-DDT
398</font><br>
04 07 2006<br>
Tuesday</b></font></p>
<p align="center" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#006600">SAFTA</font></b><font color="#006600"><b>
in place - India notifies customs concessions</b></font></font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The
South Asia Free Trade Area (SAFTA), consisting of India, Pakistan, Sri Lanka,
Bangladesh, Bhutan, Nepal and the Maldives, was to have come into force from
1<sup>st</sup> January (see <u><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=3105">DDT
274 -02 -01- 2006)</a></u><b><u> </u></b> but was delayed for six months to
give member countries time to put their systems in place. Nepal was given an
additional month.</font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Under
the new regime, tariffs on 4,000 items in Bhutan, Bangladesh, Nepal and Maldives
are to be lowered from 12.5 percent to zero by July 2008. In the case of India,
Pakistan and Sri Lanka, the tariff is to be lowered to five percent by 2013.</font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In
SAFTA, Bangladesh, Bhutan, Nepal and Maldives are categorized as 'Least Developed
Countries' (LDCs) and India, Pakistan and Sri Lanka are designated as 'Non-Least
Developed Countries' (NLDCs).</font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Just
like India, Pakistan’s Central Board of Revenue has also issued notifications
for the SAFTA rates, but they are not applicable for India. When it comes to
India, Pakistan cannot think of economics without politics. Pakistan had announced
that it would apply SAFTA provisions with all countries except India. And with
India, it is linked to Kashmir! </font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Interestingly,
in Maldives, there is a great appreciation for SAFTA; Maldives exports only
fish and imports everything else.</font></p>
<p align="center" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#006600">The
SAFTA notifications</font></b></font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Exemption
and a bar:</b> The Notification works like this:- There is an Appendix I and
an Appendix – II.</font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Appendix
I is the list of countries which are not LDCs (Least Developed Countries) and
this list has Pakistan and Sri Lanka. Appendix II lists out the LDCs, namely
Bangladesh, Bhutan, Maldives and Nepal. </font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">There
are three Annexures. Annexure I lists 868 tariff headings, Annexure II has 743
headings and Annexure III has 254 relating to textiles. Now these are basically
negative lists. </font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The
notification has a table which is a virtual tariff, which allows two rates of
duty for import, one for imports from the LDC countries and the other for the
NON LDC countries. </font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now
Annexure I is a negative list for imports from Pakistan and Sri Lanka – that
means the rates as per this notification will not be applicable to imports from
Pakistan and Sri Lanka for the goods covered by Annexure I. </font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Similarly,
there is a negative list for imports from LDC countries. The concessional rates
will not be applicable for imports of items covered by Annexure II, imported
from LDC countries. </font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">And
there is a common negative list – Goods covered under Annexure III pertaining
to textiles are not covered by this notification; there is another notification
for that.</font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><u><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=23&filename=notification/custom/2006/ctariff06_067.htm">NOTIFICATION
NO. 67/2006-Cus, Dated: June 30, 2006</a></u></font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Textiles
– a positive list:- </b>The 254 textile items, figuring in Annexure III in the
above notification which is a negative list there, are made into a positive
list in this notification. The items covered will get a concessional duty when
imported from the LDC countries or the big brothers! </font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><u><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=23&filename=notification/custom/2006/ctariff06_068.htm">NOTIFICATION
NO. 68/2006-Cus, Dated: June 30, 2006</a></u></font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Cascading
effect – controlled: </b>These notifications cast their shadows in other notifications
which the government has effectively noticed and controlled by making proper
amendments in various notifications making the SAFTA notifications inapplicable
in those notifications.</font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">
1. As per Notification No. <b>236/1989-Customs, DATED : September 1, 1989, </b>goods
imported from certain countries under the Agreement on the Global System of
Trade Preferences among Developing Countries, enjoy a huge concessional rate
raging from 15 to 30% of the effective rate. Now this notification is amended
to make the SAFTA notifications inapplicable to this notification.</font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">
2. <b>NOTIFICATION NO. 105/1999-Customs, DATED : August 10, 1999. </b>This notification
provides a concessional rate to imports from these very SAARC countries in accordance
with the Customs Tariff (Determination of Origin of Goods under the Agreement
on SAARC Preferential Trading Arrangement) Rules, 1995.</font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">
3. <b>NOTIFICATION NO. 26/2000-Customs, DATED : March 1, 2000, </b>exempts goods
imported from Sri Lanka in accordance with the Customs Tariff (Determination
of Origin under the Free Trade Agreement between the Democratic Socialist Republic
of Sri Lanka and the Republic of India) Rules, 2000. Those who avail this notification
cannot take the benefit of SAFTA notifications for determining the rate of duty.</font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">
4. <b>NOTIFICATION NO. 72/2005-Cus., Dated : July 22, 2005 </b>allows exemption
to certain goods imported under the Bangkok agreement. Bangladesh and Sri Lanka
are included under this notification.</font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Incidentally
while making these amendments, the Government used the opportunity to make some
much needed amendments which were to be done long ago. </font></p>
<p align="justify" ><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=23&filename=notification/custom/2006/ctariff06_069.htm"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><u>NOTIFICATION
NO. 69/2006-Cus, Dated: June 30, 2006</u></font></a></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Rules
of Origin notified: </b>the Rules of Determination of Origin of Goods under
the Agreement on South Asian Free Trade Area (SAFTA) has been notified.</font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><u>NOTIFICATION
NO. 75/2006-NT-Cus., Dated: June 30, 2006</u></b></font></p>
<p align="center" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#006600">DEPB</font></b><font color="#006600"><b>
rates announced</b></font></font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DGFT
has notified the new DEPB rates amending the schedule of DEPB rates. </font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><u><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=47&filename=notification/dgft/2006/dgft06pn029.htm">PUBLIC
NOTICE NO. 29 (RE-2006)/2004-2009 . DATED 3rd July, 2006</a></u></font></p>
<p align="center" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#006600">DGFT
amends HOP</font></b></font></p>
<p ><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>New form of
CA certificate for Service Providers / Service Exporters: </b>At present Form
26 is used for CA’s certificate for Statement of exports made in the preceding
three licensing years. Now a new certificate proforma 26A is prescribed for
the certificate pertaining to Service Providers / Service Exporters.</font></p>
<p ><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><u><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=47&filename=notification/dgft/2006/dgft06pn028.htm">PUBLIC
NOTICE NO. 28 (RE-2006)/2004-2009 . DATED 3rd July, 2006</a></u></font></p>
<p ><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until
Tomorrow with more DDT </font></p>
<p ><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Have
a nice Day. </font></p>
<p ><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Mail
your comments to </font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><a href="mailto:vijaywrite@taxindiaonline.com">vijaywrite@taxindiaonline.com</a></font></p>
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