Government of India
Ministry of Finance
Department of Revenue
Sub: Foreign Trade Policy, 2004-2009 - Changes made in Advance License, DFRC, EPCG, and DEPB Schemes, etc. - reg.
The Foreign Trade Policy for the period 2004-09 has come into force with effect from the 1 st September, 2004. In this Policy certain new schemes have been introduced for service providers, status holders, agriculture and floriculture sector.
Amendments have also been made in the existing DEPB, DFRC, EPCG and DEEC Schemes. The details of the new schemes introduced and changes made in the existing schemes are as follows.
2. Sector specific provisions:
3. Vishesh Krishi Upaj Yojana
A new Scheme namely, Vishesh Krishi Upaj Yojana has been incorporated in the Policy at Paragraph 3.8 to promote export of fruits, vegetables, flowers etc. Under the Scheme, the exporters of such products are entitled for duty credit scrip equivalent to 5% of the FOB value of exports for each licensing year commencing from 1.4.2004. The goods imported under the Scheme are freely transferable. Duty credit may be used for import of inputs or goods including capital goods as may be notified. It has also been provided that additional customs duty / excise duty paid in cash or through debit under Vishesh Krishi Upaj Yojana may be adjusted as CENVAT credit or as duty drawback. The exemption notification for implementation of this Scheme will be issued in due course.
4. Target Plus Scheme
5. Served from India Scheme .
6. DEPB Scheme
7. EPCG Scheme
8 . DFRC Scheme
9. Deemed Exports
10. Import of second hand capital goods
Import of second hand capital goods, including refurbished/reconditioned spares, shall be allowed. Hitherto, import of second hand capital goods of more than 10 years old was restricted.
11. Execution of BG/LUT
It has been provided in paragraph 2.27.1. of the Foreign Trade Policy that all the exporters having export turnover of at least Rs 5 crores in the current or preceding financial year and having a good track record of exports for last three years will be exempted from furnishing a BG for any of the Schemes under the Policy and may furnish a LUT in lieu of BG. In this connection, Circular No.58 /2004-Customs, dated 21.10.2004 may be referred to for details.
12. Settlement of cases of failure of discharge of Export Obligation
The new Foreign Trade Policy also provides for regularization of export obligation default cases and settlement of customs duty and interest thereof through Settlement Commission with a view to providing assistance to firms who have defaulted under the Policy for reasons beyond their control and also to facilitate the merger, acquisition and rehabilitation of sick units. This would come into effect after an amendment in the Customs Act, 1962 is made in this regard.
13. A suitable Trade Notice and Standing Order may be issued for the guidance of the trade and staff. Difficulties faced, if any, in implementation of the Circular may be brought to the notice of the Board at an early date.
14. Receipt of this Circular may please be acknowledged.
P. K. Mohanty
Joint Secretary (Drawback)