SEZs exempt from anti-dumping dutyIn a bid to allow exporters to source raw-materials and other inputs at globally-competitive rates, the government has exempted 100 percent export oriented units (EOUs) and companies located in special economic zones (SEZs), free trade zones (FTZs) from anti-dumping and safeguard duties as these imports are used as inputs for export production.
A similar exemption has also been made for exempting TRQ (tariff rate quota) imports from safeguard duty. TRQ is a quantity based duty concession which is nullified if safeguard duty is imposed. Therefore, the exemption has been introduced. While imports up to a fixed quantum is allowed under concessional duty through TRQs, the excess volume is subject to normal duty.
Two-way fungibility norms for ADR/GDRs finalisedThe centre has finalised the norms for extending two-way fungibility to companies tapping the ADR/GDR markets. According to officials, companies would be permitted to maintain the levels of GDRs/ADRs without seeking fresh government clearances.
Companies would be permitted to reissue ADRs/GDRs up to the level for which they hold a original clearance without seeking a fresh approval every time a depository holder divests his holding. Providing two-way fungibility to companies is one of the milestones on the road to full convertibility. This is also a tool to manage forex reserves which in April stood at $ 43 billion.
SEZs, EPZs, EOUs exempted from the provisions of mandatory quality standardsThe government has exempted imports by the special economic zones (SEZs), hundred percent export-oriented units and units set up in the export processing zones (EPZs) from the provisions of the mandatory quality standards notified in November 2000. The same dispensation has also been made applicable to imports made against annual advance licences and those for re-export purpose, according to a circular recently issued by the Directorate General of Foreign Trade (DGFT).
Foreign packaged products have been also brought within the ambit of the provisions of the Standards and Measures (Packaged Commodities) Rules, 1997 and are required to give details such as name and address of the supplier, month and year of packaging the maximum retail price etc.
Under the order issued under the Foreign Trade (Regulation and Development) Act a list of 131 imported products had been notified and for those the Indian quality standards had also been made mandatory. The suppliers were required to register themselves with the Bureau of Indian Standards. These items included consumer goods such as batteries, toys and writing instruments.
Both the measures are fully WTO-complaint and are intended to protect the domestic indsutry from the fall-out of the removal of quantitative restrictions on the remaining 715 tariff lines.
Companies must contribute to revival fundThe draft bill on insolvency laws has recommended that all companies, existing as well as new, should mandatorily contribute 0.1 percent of their annual turnover every year to a national fund to be created for revival and rehabilitation companies.
Also forming a part of the bill are measures relating to strengthening of the financial sector to safeguard the interests of the secured creditors - banks and FIs on the loan recovery front. Benches of National Company Law Tribunal (NCLT) to deal with insolvency and rehabilitation of sick companies and comprising of 3 members viz. judicial, technical and a representative of labour should be set up in all districts which are principal seats of the High Courts. Benches could also be set up in certain important commercial districts which do not have a seat of a high court bench. The principal bench of the tribunal is to be headquartered in Delhi.
Company Law Appellate Tribunal should be set up with benches at the four metropolitan cities and other major metros to hear appeals to orders passed by the NCLT. Any further review of the order could be sought before the Supreme Court only.
The proposed insolvency laws shall take winding up of unviable units out of the purview of the high courts. The bill would be known as Companies (Third Amendment) Bill, 2001, and it shall replace the Sick Industrial Companies (Special Provisions) Act, 1985. The BIFR and the CLB would be scrapped once the NCLT is set up.
Under the proposed norms, though Sick Industries Companies Act (SICA) would be scrapped, its crucial provisions, contained in Section 20 and Section 21, would be included in the proposed Insolvency Act. These Sections deal with recognition of sickness and the revival and rehabilitation of companies.
The proposed provisions also include barring companies from changing the opening and closing date of the financial year, permitting the transfer of shares to the new owner subject to the new insolvency court's (to be called the National Company Law Tribunal) approval and removing legal provisions for obtaining stay from courts.
EXIM Policy - 2001The Union Commerce Minister, Shri Murasoli Maran while announcing the Exim Policy for the Year 2001 on April 01, 2001 set the goal of achieving 1% share of global trade by the Year 2004-2005. The Exim Policy has made an attempt to raise Indian Exports to US$ 75 b by 2004 from the current expected level of $ 43 b which works out to approximately 18% growth rate mainly through giving a boost to agricultural exports, expanding market access through new initiatives and involving states in these efforts as under:
Agricultural Export ZonesThe policy has proposed setting of AEZs on the lines of SEZs which would take care of pre and post harvest treatment and operations, plant protection, processing, packaging etc. which are vital for exports.
The service providers will be enitled to EPCG scheme benefits for setting up the necessary infrastructure facilities. Agri-exporters shall also be entitled for recognition as a export house/trading house/star trading house/super trading house.
Market Access InitiativesMarket Access Initiatives to showcase Indian products in key global markets will have a corpus of Rs.500 crore in the next fiscal.
Business-cum-trade facilitation centre and trade portal to be set up in Pragati Maidan, New Delhi, to build up a comprehensive database for exporters and importers.
Special Economic Zones (SEZs)Developers of these zones have been allowed duty free import or procurement from DTA for development of SEZs.
The SSI reservation has also been done away with for the purposes of setting up of units in these zones. The time limit for realising the export proceeds has been extended to 365 days against the normal period of 180 days. Units have been allowed to retain 100% of the proceeds in EEFC account. SEZ developers given infrastructure status under Income-Tax Act.
Removal of QRsQuantitative restrictions on 715 items removed, 342 are textile products, 147 agricultural including alcoholic beverages and 226 other manufactured products including automobiles.
War room set up to monitor any surge in imports on 600 sensitive items and take safeguard measures including imposition of duties.
QRs to remain on 600 items broadly in sectors like defence, communication, live animals, drugs and chemicals.
Annual Advance LicenseThe AAL facilities have been extended to deemed exports and intermediate supplies. The entitlement limit has been increased from 125% to 200% of the FOB value of the preceding year.
Advance LicencesDuty free import of fuel has been allowed under SION (Standard Input Output Norms) for sectors where the cost of the same is more than 10% of the manufacturing cost.
Duty free replenishment certificate scheme
Validity of DFRC has been extended from 12 months to 18 months.
EOU/EPZ/EHTP/STP UnitsHighest NFEP requirement has been fixed at a minimum of 10% and minimum export performance required has been reduced to 3 times the value of capital goods over 5 years instead of five times the value. Sub-contracting of production process abroad has also been permitted. Units would now have to account for duty free goods in overall terms and not consignment wise.
OthersThe facility of electronic filing of application has been extended to 29 out of the 31 DGFT offices. Electronic filing has been extended to all categories of licences.
Stiff non-tariff barriers like left-hand drive and ban on vehicles over three years imposed.
of second hand capital goods upto 10 years old allowed.