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FOREIGN TRADE POLICY ANALYSIS:

Chapter 3 Export Promotion Schemes

Sr.

No.

FTP / HBOP

Para New Provision Comments / Impact

FTP-3

3.00

(Objective)

The objective of schemes under this chapter is to provide rewards to exporters to offset infrastructural inefficiencies and associated costs involved and to provide exporters a level playing field.

FTP-3

3.01

(Export from India Schemes)

There shall be following two schemes for exports of Merchandise and Services respectively: (i) Merchandise Exports from India Scheme (MEIS). (ii) Service Exports from India Scheme (SEIS).

Existing FPS, MLFPS, VKGUY, FMS & Agri. Infrastructure Incentive Scripts schemes have been merged into a single reward scheme i.e. MEIS. Thus simplifying the application process for obtaining duty credit scripts.

Existing SFIS has been simplified and covered under Service Exports from India Scheme (SEIS)

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FTP-3

3.02

(Nature of Rewards)

Duty Credit Scrips shall be granted as rewards under MEIS and SEIS. The Duty Credit Scrips and goods imported / domestically procured against them shall be freely transferable. The Duty Credit Scrips can be used for : (i) Payment of Customs Duties for import of inputs or goods, except items listed in Appendix 3A. (ii) Payment of excise duties on domestic procurement of inputs or goods, including capital goods as per DoR notification. (iii) Payment of service tax on procurement of services as per DoR notification. (iv) Payment of Customs Duty and fee as per paragraph 3.18 of this Policy.

1. SEIS & MEIS scrips are freely transferable as compared to earlier SFIS scrip which was non-transferable

2. The SEIS/ MEIS scrip also can be used for payment of Custom duty/ Excise duty on procurement of inputs & capital goods and SEIS scrip can be used for payment of service tax on procurement of services. In SFIS the scrip was allowed only for payment of custom duty/ excise duty on procurement of capital goods/ spares/ office equipment /consumables/ office furniture etc.

3. It is welcome provision whereby custom duties in case of EO defaults & fees can now be paid through SEIS/ MEIS scrip, however penalty/ interest is required to paid in cash. Even for payment of value for shortfall in EO can be made through the scrip.

4. Due to merger of all the 5 schemes as mentioned above. The new duty credit script, whether it is MEIS or SEIS, the same can be utilised for payment of duties, whether customs, excise, service tax & at the same time avail cenvat credit or even duty drawback.

5. Transferability clause continues even for these new scripts.

6. Big relief is either of the duty credit scripts can be used for import/procurement of goods & services.

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3.04 (Entitlement under MEIS)

Exports of notified goods/products with ITC[HS] code, to notified markets as listed in Appendix 3B, shall be rewarded under MEIS. Appendix 3B also lists the rate(s) of rewards on various notified products [ITC (HS) code wise]. The basis of calculation of reward would be on realised FOB value of exports in free foreign exchange, or on FOB value of exports as given in the Shipping Bills in free foreign exchange, whichever is less, unless otherwise specified.

Appendix 3B has been notified covering almost all the products ranging benefit of duty credit scrip amounting to 0-5% of FOB value of exports depending on product and market categories i.e. traditional market, potential and focus market and other market covering 239 countries vide Not No. 02/2015-2020 dated 1-04-2015

Basis for reward will continue to be on realization value in FCC or value as per shipping bill, whichever is less

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3.05 (Export of goods through

courier or foreign post offices using

e-Commerce)

1. Exports of goods through courier or foreign post office using e-commerce, as notified in Appendix 3C, of FOB value upto Rs. 25000 per consignment shall be entitled for rewards under MEIS.

2. If the value of exports using e-commerce platform is more than Rs 25000 per consignment then MEIS reward would be limited to FOB value of Rs.25000 only.

3. Such goods can be exported in manual mode through Foreign Post Offices at New Delhi, Mumbai and Chennai

Export of such goods under Courier Regulations shall be allowed manually on pilot basis through Airports at Delhi, Mumbai and Chennai as per appropriate amendments in regulations to be made by Department of Revenue. Department of Revenue shall fast track the implementation of EDI mode at courier terminals

Looking into the growth in e-commerce activity, the ministry has decided to extend the FTP benefits for goods exported through courier or foreign posts.

Maximum benefit will be restricted as a percentage to FOB value of Rs. 25000 or less per shipment.

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3.06(Ineligible categories under

MEIS)

The following exports categories /sectors shall be ineligible for Duty Credit Scrip entitlement under MEIS

1. EOUs / EHTPs / BTPs/ STPs who are availing direct tax benefits / exemption.

2. Supplies made from DTA units to SEZ units 3. Export of imported goods covered under paragraph 2.46

of FTP 4. Exports through trans-shipment, meaning thereby exports

that are originating in third country but trans-shipped through India

5. Deemed Exports 6. SEZ/EOU/EHTP/BPT/FTWZ products exported through

DTA units 7. Items, which are restricted or prohibited for export under

Schedule-2 of Export Policy in ITC (HS), unless specifically notified in Appendix 3B

8. Service Export 9. Red sanders and beach sand 10. Export products which are subject to Minimum export

price or export duty 11. Diamond Gold, Silver, Platinum, other precious metal in

any form including plain and studded jewellery and other precious and semi-precious stones

12. Ores and concentrates of all types and in all formations 13. Cereals of all types 14. Sugar of all types and all forms 15. Crude / petroleum oil and crude / primary and base

products of all types and all formulations 16. Export of milk and milk products 17. Export of Meat and Meat Products 18. Products wherein precious metal/diamond are used or

Articles which are studded with precious stones 19. Exports made by units in FTWZ

The list of ineligible categories in the earlier schemes continues more or less the same. As a matter of fact there is not a single EOU/EHTP/BTP who is availing direct tax benefit since direct tax benefit has been withdrawn since 2010.

Goods manufactured by SEZ/EOU but exported from DTA ought to have been allowed such benefit since SEZ/EOU are also allowed to avail such benefit under this scheme.

Exports like exports of onion, marble, rice etc. where minimum export price is fixed and products like iron ore on which export duty is collected will not be eligible for the benefit under the scheme.

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FTP-3

3.07 (Objective)

Objective of Service Exports from India Scheme (SEIS) is to encourage export of notified Services from India.

SEIS shall apply to ‘Service Providers located in India’ instead of ‘Indian Service Providers’. All service providers providing notified services are covered under this scheme.

FTP-3

3.08(a) (Eligibility) Service Providers of notified services, located in India, shall be rewarded under SEIS, subject to conditions as may be notified. Only Services rendered in the manner as per Para 9.51(i) and Para 9.51(ii) of this policy shall be eligible. The notified services and rates of rewards are listed in Appendix 3D.

Service provider has been defined in Para 9.51. Services provided from India to other country i.e. Cross border trade & services supplied to the consumer(s) of any other country i.e. services consumed abroad will be eligible for SEIS.

Similar service providers of services listed in Appendix 41 of HBP v1 are specified in Appendix 3D only a new service- Airport Operations & Ground Handling under Air Transport Service category have been included.

FTP-3

3.08 (b) Such service provider should have minimum net free foreign exchange earnings of US$15,000 in preceding financial year to be eligible for Duty Credit Scrip. For

Service providers having minimum Net free foreign exchange earning US $ 15,000 in preceding F.Y. are only eligible for this scheme However for Individual service

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Individual Service Providers and sole proprietorship, such minimum net free foreign exchange earnings criteria would be US$10,000 in preceding financial year.

providers and sole proprietorship, minimum limit of net free foreign exchange earnings would be US$10,000 in preceding financial year.

In SFIS the eligibility was based Free foreign exchange earnings and now in SEIS the eligibility is based on Net free foreign exchange earnings.

Earlier minimum requirement for SFIS was at least Rs. 10 lakhs free foreign exchange earnings in current financial year and in case of Individual Indian service providers minimum requirement was Rs. 5 lakhs free foreign exchange earnings.

FTP-3

3.08 (c ) Payment in Indian Rupees for service charges earned on specified services, shall be treated as receipt in deemed foreign exchange as per guidelines of Reserve Bank of India. The list of such services is indicated in Appendix 3E.

For certain notified service payment in Indian rupees as service charges shall be considered as receipt in deemed foreign exchange. The list of specified services will be notified in Appendix 3E

FTP-3

3.08 (d) & (e ) Net Foreign exchange earnings for the scheme are defined as under: Net Foreign Exchange = Gross Earnings of Foreign Exchange minus Total expenses / payment / remittances of Foreign Exchange by the IEC holder, relating to service sector in the Financial year. If the IEC holder is a manufacturer of goods as well as service provider, then the foreign exchange earnings and Total expenses / payment / remittances shall be taken into account for service sector only.

Net foreign Exchange= Gross earnings in foreign exchange relating to service sector by the IEC holder- Total expenses/ payments/ remittances in foreign exchange relating to service sector by IEC Holder.

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FTP-3

3.08 (f) In order to claim reward under the scheme, Service provider shall have to have an active IEC at the time of rendering such services for which rewards are claimed.

Needless to say only service providers having active IEC at the time of rendering services can claim the rewards under SEIS

FTP-3

3.09(1)

(Ineligible categories under SEIS)

Foreign exchange remittances other than those earned for rendering of notified services would not be counted for entitlement. Thus, other sources of foreign exchange earnings such as equity or debt participation, donations, receipts of repayment of loans etc. and any other inflow of foreign exchange, unrelated to rendering of service, would be ineligible.

Other than notified categories of services are ineligible under SEIS. Further any foreign exchange earnings from other sources which are not related to rendering of service would be ineligible.

FTP-3

3.09 (2) (a) (2) Following shall not be taken into account for calculation of entitlement under the scheme (a) Foreign Exchange remittances: I. Related to Financial Services Sector (i) Raising of all types of foreign currency Loans; (ii) Export proceeds realization of clients; (iii) Issuance of Foreign Equity through ADRs / GDRs or other similar instruments; (iv) Issuance of foreign currency Bonds; (v) Sale of securities and other financial instruments; (vi) Other receivables not connected with services rendered by financial institutions; and II. Earned through contract/regular employment abroad (e.g. labour remittances);

Certain remittances received in Foreign Exchange by financial service sector shall not be considered for calculating entitlement under the scheme. Further any foreign exchange earned through contract/ regular employment abroad like labour remittances shall also not be entitled under the scheme. Similar conditions which were earlier applicable to Served from India Scheme (SFIS) w.r.t ineligible remittances are specified for SEIS.

FTP-3

3.09 (2) (b-i) (b) Payments for services received from EEFC Account; (c) Foreign exchange turnover by Healthcare Institutions like equity participation, donations etc. (d) Foreign exchange turnover by Educational Institutions

Same categories of ineligible remittances of SFIS are applicable to SEIS. Only Service provider under telecom sector which were eligible under SFIS now will not be entitled for SEIS.

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like equity participation, donations etc. (e) Export turnover relating to services of units operating under SEZ / EOU / EHTP / STPI / BTP Schemes or supplies of services made to such units; (f) Clubbing of turnover of services rendered by SEZ / EOU /EHTP / STPI / BTP units with turnover of DTA Service Providers; (g) Exports of Goods. (h) Foreign Exchange earnings for services provided by Airlines, Shipping lines service providers plying from any foreign country X to any foreign country Y routes not touching India at all. (i) Service providers in Telecom Sector.

Even though SEZ units exporting the goods are eligible for MEIS. IT & ITES SEZ/EOU units will not be entitled for SEIS.

FTP-3

3.10

(Entitlement under SEIS)

Service Providers of eligible services shall be entitled to Duty Credit Scrip at notified rates (as given in Appendix 3D) on net foreign exchange earned.

Duty Credit Scrip on net foreign exchange earned at the rates specified in Appendix 3D will be available to eligible service provider. Duty credit scrip up to maximum of 5% of Net foreign exchange earning can be availed.

Earlier in SFIS the entitlement was duty credit scrip equivalent to 10% of free foreign exchange earned during current financial year.

FTP-3

3.11

(Remittances through Credit Card

and other instruments for MEIS and SEIS)

Free Foreign Exchange earned through international credit cards and other instruments, as permitted by RBI shall also be taken into account for computation of value of exports.

Similar provisions of eligible remittances are continued in SEIS.

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FTP-3

3.12

Effective date of schemes (MEIS and

SEIS)

The schemes shall come into force with effect from the date of notification of this Policy, i.e. the rewards under MEIS/SEIS shall be admissible for exports made/services rendered on or after the date of notification of this Policy.

The scheme is effective from 1-April-2015 as per Not 01/2014-2020 dated 1-April-2015.

HBoP-3 3.01 (Merchandise Exports From India

Scheme (MEIS))

(a) Policy for Merchandise Exports from India Scheme (MEIS) is given in Chapter 3 of FTP.

(b) An application for claiming rewards under MEIS on exports(other than Export of goods through courier or foreign post offices using e-Commerce), shall be filed online, using digital signature, on DGFT website at http://dgft.gov.in with RA concerned in ANF 3A. The relevant shipping bills and e BRC shall be linked with the on line application.

(c) If application is filed for exports made through EDI ports, then hard copy of the following documents need not be submitted to RA: hard copy of applications to DGFT, EDI shipping bills, electronic Bank Realisation Certificate (e-BRC) and RCMC. The applicant shall submit the proof of landing in the manner prescribed under paragraph 3.03 of HBP.

(d) In case application is filed for exports made through non EDI ports, then applicant need to submit export promotion copy of non EDI shipping

As far as application is concerned, it continues to be filed online using digital signature on DGFT website.

Instead of ANF 3C, application will be filed in ANF 3A & the relevant shipping bills & eBRC shall be linked with online application.

For exports under EDI ports, applicant need not submit hard copy of applications to DGFT, including shipping bills, BRC’s, etc.

For non EDI ports, applicant continues to submit EP copy of the shipping bill. But at same time, need not submit hard copy of application to DGFT, eBRC & RCMC.

Original documents not submitted at the time of application has to be retained by the applicant for a period of 3 years from the date of issue of the script, & needs to be presented on demand at any time within 3 years.

Non production of documents will result into surrendering the script or in case if used, liable to

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bills. The applicant shall submit the proof of landing in the manner prescribed under paragraph 3.03 of HBP. The applicant shall upload scanned copies of any other prescribed documents for claiming scrip unless specified otherwise. However applicant need not submit hard copy of applications to DGFT, electronic Bank Realisation Certificate (e-BRC) and RCMC in this case also.

(e) Applicant shall file separate application for each port of export.

(f) Processing of Non EDI Shipping bills at RA: In cases the Non EDI shipping bills or the shipping bills not received through the Message Exchange from Customs, concerned RA shall verify the details entered by the exporter from the original shipping bills before grant of scrip

(g) No manual feeding allowed for EDI shipments: For EDI Shipping Bill, no manual feeding of Shipping bill details shall be allowed to the applicants in the online system. Rewards will be granted by RAs without the need for cross verifying EDI Shipping Bill details.

(h) RA shall process the electronically acknowledged files and scrip shall be issued after

duties, along with interest.

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due scrutiny of electronic documents.

(i) The documents which are not required to be submitted in original, shall be retained by the applicant for a period of 3 years from the date of issuance of script.

(j) Licensing Authority may call such documents in original at any time within 3 years. In case the applicant fails to submit the original documents on demand by Licensing Authority the applicant shall be liable to refund the rewards granted along with interest at the rate prescribed under Section 28 AA of Customs Act 1962, from the date of issuance of scrip.

(k) Eligibility of product, corresponding ITC[HS] code, and markets(as given in Appendix 3B) for claiming rewards under MEIS shall be determined from Let Export Date as per Paragraph 9.12 of HBP.

HBoP-3 3.02 (Applications for Export of

goods through courier or foreign post offices using

e-Commerce)

(a) Application shall be filed on line, using digital signature, in ANF 3D by exporter. The applicant shall submit the proof of landing in the manner prescribed under paragraph 3.03 of HBP.

(b) Applicant shall file separate application for each port of export.

(c) RA will manually examine the submitted

Procedure remains to be online application, but RA will manually examine the submitted documents before issuing the script.

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documents before grant of scrip. HBoP-3 3.03 (Proof of

Landing) (a) Wherever the reward under MEIS is available to all countries, proof of landing shall not be required to be submitted for claiming the reward

(b) Uploading/submission of documents, as a proof of landing:

As a measure of ease of doing business, documents as a proof of landing of export consignment in notified market can be digitally uploaded in the following manner:-

(i) Any exporter may upload the scanned copy of document as mentioned at paragraph 3.03 (c) (i) under his digital signature.

(ii) Status holders falling in the category of Three Star, Four Star or Five Star export house category may upload scanned copies of documents as mentioned at paragraph 3.03(c) (iv).

(iii) In all other cases the physical copy, in original, shall be filed by all categories of exporters.

(c) Applicant shall be required to submit or upload, as the case may be, any one of the following documents as a proof of landing of export

Going forward, wherever proof of landing is required at the time of application the scanned copy of BOE filed by the importer can be digitally uploaded by the exporter under his digital signature.

In case of Three/Four or Five Star export house categories, tracking report from goods carrier duly certified by them shall be uploaded as proof of landing.

In other cases, original copies of delivery order issued by port authorities, arrival notice issued by goods carrier or any other documents satisfying RA will be submitted to DGFT & not uploaded.

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consignment in notified Market:

(i) A self attested copy of import bill of entry filed by importer in specified market, or

(ii) Delivery order issued by port authorities, or

(iii) Arrival notice issued by goods carrier, or

(iv) Tracking report from the goods carrier (Shipping Line/Airline etc. or his accredited agent in India) duly certified by them, evidencing arrival of export cargo to destination Market, or

(v) For Land locked notified Market, Rail/Lorry receipts of transportation of goods from Port to Land locked notified Market,

(vi) Any other document that may satisfactorily prove to RA concerned that goods have landed in / reached the notified Market.

(d) In case of (iv) and (vi) above, the accredited agent of the Goods Carrier must certify that he is the accredited agent of the concerned Goods Carrier on the date of issuance of the tracking report / document.

(e) Further, in the case of issuance of any other

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document under (vi) above, the accredited agent must state that proof of landing of goods in relevant notified Market is given based on information available in the Goods Carrier’s backup database and he has verified the same and issued this document accordingly.

(f) In cases of exports using e commerce, exporter may submit express operator landing certificate/online web tracking print out indicating airway bill number as prescribed in enclosure (B) to ANF 3D.

HBoP-3 3.04

Service Exports from India Scheme (SEIS)

(a) Policy for Service Exports From India Scheme (SEIS) is given in Chapter 3 of FTP. (b) An application for grant of duty credit scrip for eligible services rendered shall be filed online for a financial year on annual basis in ANF 3B using digital signature. (c) RA shall process the application received online after due scrutiny.

Application for SEIS scrip to be made on annual basis through ANF 3B which is to be digitally signed. In SFIS application was allowed to be filed monthly/ quarterly/ half yearly/ annually in ANF 3B.

Now the procedure will be simpler and faster due to online application digitally signed in Form ANF 3B.

HBoP-3 3.05

(Transitional Arrangement)

(a) For the goods exported or services rendered upto the date of notification of current Foreign Trade Policy, which were otherwise eligible for issuance of scrip under erstwhile chapter 3 of the earlier Foreign Trade Policy(ies) and scrip is applied on or after the date of notification of current Foreign Trade Policy against such export of goods or services rendered, the application shall be made to Jurisdictional RA in the form with documents as prescribed in the HBP v I 2009-2014.

The exports of service & goods made up to 31-March-2015 which were eligible for FPS/MLFPS/VKGUY/SFIS can submit the respective application in formats as prescribed under HBP v1 2009-14 up to 30-June-2015 however after 1-July-2015 application for duty scrip is required to to be made as per Para 3.01 or 3.04 of HBP 2015-20.

Application for SHIS, IEIS & Agri Infrastructure incentive scheme to made in form and as per procedure prescribed in previous policy(ies).

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(b) Up to 30th June 2015, applicants in respect of exports on which FPS/MLFPS/FMS/VKGUY/SFIS are claimed, shall have a choice to file applications in the manner prescribed in the previous policy(ies) or in the manner given in paragraph 3.01 or paragraph 3.04, as applicable, of HBP 2015-20. From 1st July 2015, all such applications shall be submitted in the manner given in paragraph 3.01 or paragraph 3.04, as applicable, of HBP 2015-20 only. (c) Applicants shall continue to file application in respect of SHIS, IEIS and Agri Infrastructure incentive scheme scrip in the application form and manner prescribed in the previous policy (ies).

HBoP-3 3.06

(Jurisdictional RA / RA Concerned)

Applicant shall have option to choose Jurisdictional RA on the basis of Corporate Office/ Registered Office/Head Office / Branch Office address endorsed on IEC for submitting application/applications under MEIS and SEIS. This option need to be exercised at the beginning of financial year. Once an option is exercised, no change would be allowed for claims relating to that year. To illustrate, if an exporter has chosen RA Chennai for claiming rewards for exports made in 2015-16,then all claims for exports made in 2015-16, irrespective of the date of application shall be made to RA Chennai only.

Similar provisions are continued from earlier Chapter 3 however once the option of RA is exercised at the beginning of a financial year it can be changed after the end of financial year instead of no change in RA was allowed in earlier Chapter 3.

Once the RA is selected for particular financial year all the claims for exports made during that respective year should be made to same RA even if RA is changed subsequently.

HBoP-3 3.07

(Applicability of Provisions

contained in Chapter 2 and 9 of

this HBP)

Provisions contained in Chapter 2 and 9 of this HBP shall apply to MEIS and SEIS.

Similar provision.

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HBoP-3 3.08

(Port of Registration of Scrips)

(a) Port of Registration under MEIS would be as follows: (i) Duty Credit Scrip (including splits) under MEIS shall be issued with a single port of registration which shall be the port of export. (ii) Duty credit scrip needs to be registered at the port of exports. This is to be done prior to allowing usage of duty credit. Once registered at EDI port, scrip can be automatically used at any EDI port for import and at any manual port under Telegraphic Release Advise (TRA) procedure. (iii) In case port of registration is a manual port, TRA shall be required for imports at any other port. (b) In case of scrip applied under Service Exports from India Scheme, the applicant can choose any port as port of registration and mention it in the application at the appropriate column. RA will issue the scrip with such port of registration. Such Duty credit scrip needs to be registered at the port of registration of duty credit. Once registered at EDI port, scrip can be automatically be used at any EDI port for import and at any manual port under Telegraphic Release Advise (TRA) procedure. In case port of registration is a manual port, TRA shall be required for imports at any other port.

Similar provision. In case SEIS the port of registration needs to be specified in the registration itself and RA will issue the scrip with such port of registration.

HBoP-3 3.09

(Facility for Split Scrips)

(a) On request, split certificates of Duty Credit Scrip subject to a minimum of Rs. 5 Lakh each and multiples thereof may also be issued, at the time of application. (b) Once Duty Credit Scrip has been issued, request for splits can be permitted with same port of registration as appearing on the original Scrip. The above procedure shall be applicable only in respect of EDI enabled ports. (c) In case of export through non-EDI ports, the facility of

Similar provision as per Chapter-3 HBP v1 2009-2014.

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splits shall not be allowed after issue of Scrip. HBoP-3 3.10

(Procedure to upload documents

by Chartered Accountant /

Company Secretary / Cost Accountant)

(a) In order to move towards paperless processing of reward schemes, an electronic procedure is being developed to upload digitally signed documents by Chartered Accountant / Company Secretary / Cost Accountant. Such documents like annexure attached to ANF 3 B, ANF 3C and ANF 3D, which are at present signed by these signatories, can be facilitated by this procedure. (b) Till such time it is made mandatory to upload these annexure digitally, such annexures attached to ANF 3B, ANF3C, ANF3D would continue to be submitted in physical from to RA. (c) Exporter shall link digitally uploaded annexure with his online applications after creation of such facility.

Similar provision as per Chapter-3 HBP v1 2009-2014.

HBoP-3 3.11

(Import from private / public Bonded

warehouses)

Entitlement can be used for import from private / public bonded warehouses subject to fulfilment of paragraph 2.36 of FTP and terms and conditions of DoR notification.

Similar provision as per Chapter-3 HBP v1 2009-2014.

HBoP-3 3.12

(Re-export of defective / unfit

goods)

Goods imported which are found defective or unfit for use, may be re-exported, as per DoR guidelines. Where Duty Credit Scrip has been used for imports, Customs shall issue a certificate containing particulars of Scrip used, date of import of re-exported goods and amount debited while importing such goods. Based on this certificate, upon application, a fresh Scrip shall be issued by concerned RA to extent of 98% of debited amount, with same port of registration and valid for a period equivalent to balance period available on date of import of the defective / unfit goods.

Similar provision as per Chapter-3 HBP v1 2009-2014.

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3.13

(Validity period and Revalidation)

Duty Credit Scrip shall be valid for a period of 18 months from the date of issue and must be valid on the date on which actual debit of duty is made. Revalidation of Duty Credit Scrip shall not be permitted unless covered under paragraph 2.20(c) of HBP.

Duty credit scrip shall be valid for a period of 18 months and nor revalidation of duty credit scrip is allowed unless covered under paragraph 2.20(c) of HBP.

HBoP-3 3.14

(Declaration of Intent on shipping bills for claiming

rewards under MEIS including export of

goods through courier or foreign

post offices using e-Commerce.)

(a) Export shipments filed under all categories of the Shipping Bills would need the following declaration on the Shipping Bills in order to be eligible for claiming rewards under MEIS: “We intend to claim rewards under Merchandise Exports From India Scheme (MEIS)”. Such declaration shall be required even for export shipments under any of the schemes of Chapter 4 (including drawback), Chapter 5 or Chapter 6 of FTP. In the case of shipping bills (other than free shipping bills), such declaration of intent shall be mandatory with effect from 1st June 2015. (b) Whenever there is a decision during the financial year to include any new product/goods or new markets then to avail such rewards: (i) For exports of such products/goods, to such markets, a grace period of one month from the date of notification/public notice will be allowed for making this declaration of intent. (ii) After the grace period of one month, all exports (of such products/goods or to such markets) would have to include the declaration of intent on all categories of shipping bills. (iii) For exports made prior to date of notification/public notice of products/markets, such a declaration would not

Declaration of intent to claim rewards under MEIS is mandatory w.e.f. 1-June-2015 while filing all categories of shipping bills

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be required since such exports would have already taken place.

HBoP-3 3.15

(Last date of filing of application for Duty

Credit Scrips)

(a) Application for obtaining Duty Credit Scrip under MEIS shall be filed within a period of : (i) Twelve months from the Let Export (LEO) date or (ii) Three months from the date of : (1) Uploading of EDI shipping bills onto the DGFT server by Customs. (2) Printing/ release of shipping bills for Non EDI shipping bills. Whichever is later, in respect of shipments for which claim is being filed. (b) For SEIS, the last date for filing application shall be 12 months from the end of relevant financial year of claim period.

The application for duty credit scrip under MEIS is to filed within a period of 12 months from let export date or 3 months from the date of uploading EDI shipping bill on DGFT server by customs and printing/ release of shipping bills for non EDI shipping bills whichever is earlier. For SEIS the last date for filing of application is 12 months from the end of relevant financial year.

HBoP-3 3.16

(Application for Shipments from EDI Ports and Non-EDI Ports under MEIS)

(a) Shipments from EDI Ports and Non-EDI Ports cannot be clubbed in one application. (b) Port of registration for EDI enabled ports shall be the port of export. Accordingly separate application shall be filed for each EDI port. (c) In case of exports through non-EDI port, the port of registration shall be the relevant non EDI port of exports. Accordingly separate application shall be filed for each non EDI port. (d) Multiple applications can be filed and supplementary cut shall not be applicable. However, an application can be filed with upto a maximum of 50 shipping bills.

Similar provision as per Chapter-3 HBP v1 2009-2014. Multiple applications can be filed maximum up to 50 shipping bills however no supplementary cut will be allowed

HBoP-3 3.17

(Risk Management

The policy relating to Risk Management System is given in Paragraph 3.19 of FTP. The Risk Management System shall be in operation as under:-

New internal audit/ scrutiny within department is introduced.

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System) (a) Computer System in DGFT HQ, on random basis, will select 10% of cases for each RA which has issued scrips in the preceding month by 10th of the month. (b) The list of such selected cases will be sent to concerned RA by NIC by 15th of the month. (c) Concerned RA, will in turn, ask for the original documents by 30th of the month for examination in detail. (d) The applicant shall be under obligation to submit the document asked for in the next 15 days. (e) Concerned RA in turn will examine such documents in next 15 days. In cases, there is any deficiency the applicant shall rectify it in next one month from the date of communication by RA. In case of excess availment of rewards, the applicant shall refund the excess claim with interest as prescribed in paragraph 3.19 of FTP. (f) In case the applicant fails to submit the original documents/ rectify the deficiencies / refund the excess claim as stipulated above, RA will initiate action as per FTDR Act and Rules.

FTP-3

3.13

(Special Provisions)

(a) Government reserves the right in public interest, to specify export products or services or markets, which shall not be eligible for computation of entitlement of duty credit scrip. (b) Government reserves the right to impose restriction / change the rate/ceiling on Duty Credit Scrip under this chapter. (c) Government may also notify goods in Appendix 3A which shall not be allowed for debiting through Duty Credit Scrips in case of import. (d) Government may prescribe value cap of any kind for a

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product(s) or limit total reward per IEC holder under this chapter at any time.

FTP-3 3.14

(Transitional Arrangement)

For the goods exported or services rendered upto the date of notification of this Policy, which were otherwise eligible for issuance of scrips under erstwhile Chapter 3 of the earlier Foreign Trade Policy(ies) and scrip is applied / issued on or after notification of this Policy against such export of goods or services rendered, the then prevailing policy and procedure regarding eligibility, entitlement, transferability, usage of scrip and any other condition in force at the time of export of goods or rendering of the services, shall be applicable to such scrips.

For goods exported and services rendered up to 31-March-2015 of eligibility entitlement, transferability, usage of scrip and any other condition in force at the time of export of goods or rendering of the services, shall be applicable to such scrips.

FTP-3 3.15

(CENVAT/ Drawback)

Additional Customs duty/excise duty/Service Tax paid in cash or through debit under Duty Credit scrip shall be adjusted as CENVAT Credit or Duty Drawback as per DoR rules or notifications. Basic Custom duty paid in cash or through debit under Duty Credit scrip shall be adjusted for Duty Drawback as per DoR rules or notifications.

Now even service providers can avail CENVAT credit or duty drawback against Additional Customs duty/excise duty/Service Tax paid in cash or through debit under Duty Credit scrip. Further CENVAT credit/ Duty drawback of service tax paid through debit under duty credit scrip is allowed to manufacturer and service provider.

FTP-3 3.16

(Import under lease financing)

Utilization of Duty Credit Scrip shall be permitted for payment of duty in case of import of capital goods under lease financing in terms of provision in paragraph 2.34 of FTP.

Similar provision as per Chapter-3 HBP v1 2009-2014.

FTP-3 3.17

(Transfer of export performance)

(a) Transfer of export performance from one IEC holder to another IEC holder shall not be permitted. Thus, a shipping bill containing name of applicant shall be counted in export performance / turnover of applicant only if export proceeds from overseas are realized in applicant’s bank account and this shall be evidenced from e - BRC / FIRC. (b) However, MEIS, rewards can be claimed either by the supporting manufacturer (along with disclaimer from the

Similar provision as per Chapter-3 HBP v1 2009-2014.

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company / firm who has realized the foreign exchange directly from overseas) or by the company/ firm who has realized the foreign exchange directly from overseas.

FTP-3 3.18

(Facility of payment of custom duties in

case of E.O. defaults and fee through

duty credit scrips)

(a) Duty Credit Scrip can be utilised / debited for payment of Custom Duties in case of EO defaults for Authorizations issued under Chapters 4 and 5 of this Policy. Such utilization /usage shall be in respect of those goods which are permitted to be imported under the respective reward schemes. However, penalty / interest shall be required to be paid in cash. (b) Duty credit scrips can also be used for payment of composition fee under FTP, for payment of application fee under FTP, if any and for payment of value shortfall in EO under para 4.49 of HBP 2015-20.

The SEIS/ MEIS scrip also can be used for payment of Custom duty/ Excise duty on procurement of inputs & capital goods and SEIS scrip can be used for payment of service tax on procurement of services. In SFIS the scrip was allowed only for payment of custom duty/ excise duty on procurement of capital goods/ spares/ office equipment /consumables/ office furniture etc.

FTP-3 3.19

(Risk Management System)

(a) A Risk Management System shall be in operation whereby every month Computer system in DGFT Headquarters, on random basis, will select 10% of cases for each RA where scrips have already been issued, under each scheme. RA in turn may call for original documents in all such selected cases for further examination in detail. In case any discrepancy and/ or over claim is found on such examination, the applicant shall be under obligation to rectify such discrepancy and/or refund over claim in cash with interest at the rate prescribed under section 28 A A of the Customs Act 1962, from the date of issue of scrip in the relevant Head of Account of Customs within one month. The original holder of scrip, however, may refund such over claim by surrendering the same scrip whether partially utilized or fully unutilized, without interest. (b) Regional Authority may ask for original proof of

New internal audit/ scrutiny within department is introduced. In case of discrepancy found on such examination the applicant is required to rectify such discrepancy and/or over claim in cash with interest @ 15% within 1 month. The holder of scrip may surrender the same scrip whether fully/ partially utilized without interest. The RA may ask for original proof landing certificate, annexure to ANF, any other document at any time within 3 years from the date of issue of scrip. It is now mandatory for the applicant to maintain such documents, certificate etc. for a period of at least three years from the date of issuance of scrips.

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landing certificate, annexures attached to ANFs or any other document, which has been uploaded digitally at any time within three years from the date of issue of scrip. Failure to submit such documents in original would make applicant liable to refund the reward granted along with interest at the rate prescribed under section 28 A A of the Customs Act 1962, from the date of issuance of scrip. It would be the responsibility of applicant to maintain such documents, certificate etc. for a period of at least three years from the date of issuance of scrips.

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