Duty Procedures for Goods Import Simplified

The Director General of Foreign Trade (DGFT) has simplified the procedure for utilization of duty re-credits in cases where goods imported under the Duty Entitlement Pass Book (DEPB) scheme or under any other duty credit scheme such as Focus Product Scheme and Focus Market Scheme and found defective or unfit for use are re-exported.

According to Para 3.11.6 of the Handbook of Procedures, when goods imported under any of the duty credit schemes were re-exported, the Customs were required to issue a certificate containing particulars of the duty credit scrip used, date of import of re-exported goods and amount debited while importing such goods. Based on this certificate, an application for a fresh duty scrip had to be made to the DGFT regional offices who could issue a fresh duty credit scrip to the extent of 98 per cent of the amount debited, with the same port of registration and valid for a period equivalent to the balance period available on the date of import of the defective/unfit goods.

The DGFT Public Notice no. 22/2010 dated January 14, 2011, amends the above paragraph to say that in the case of re-export of defective or unfit goods or re-assessment of debited duty, Customs issues a re-credit certificate containing particulars of scrip used, date of import of re-exported goods and amount debited while importing such goods/re-assessment details. Customs shall permit use of this re-credit amount to the extent of 98 per cent, within a period of six months from the date of issuance of re-credit certificate. There shall be no need for issue of fresh scrip in such cases by DGFT regional offices.

This amendment, besides expanding the scope of the provision to cover cases of re-assessment of duty cases and re-export for any other reason, eliminates the need to approach the DGFT regional offices and also clearly spells out the period within which the customs certificate can be issued.

The DGFT can consider several similar cases where the need to approach the DGFT regional offices can be eliminated. For example, all duty credit schemes involve three steps — credit, debit and transfer. All these steps can be performed by the Customs without involving the DGFT regional offices, at least in EDI-enabled Customs houses.

Banks maintain accounts of their customers, which involve mainly three steps — credit, debit and transfer. The advent of computerisation has enabled banks to extend these facilities online. Any customer can operate his accounts to transfer funds. Similarly, Customs also can maintain online accounts of exporters and credit the amount of duty credit immediately after export. The account holders may be allowed to pay duty by debit to such duty credit accounts and transfer the duty credits to other importer account holders, if they so desire. Customs can monitor realization of export proceeds the way they are required to do for duty drawback disbursements.

Such simplified administration of duty credit schemes (in particular, the widely used DEPB scheme) will eliminate the need to approach the DGFT regional offices for issue of scrips and all the attendant problems involved in transmission of shipping bills, filing application for scrips, handling of scrips, duplicate scrips, and manual debiting of the scrips, etc.

The DGFT should appreciate that his regional offices are sources of unnecessary transaction costs and should find more ways to eliminate the need for exporters to approach them.

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