This Tax Alert summarizes
Notification and Public Notice[1] issued by the Directorate General
of Foreign Trade (DGFT) extending Foreign Trade Policy 2015-2020 (FTP) by one
year and announcing various relief measures due to unprecedented current
situation arising out of the pandemic COVID-19.
The validity of FTP, Handbook of
Procedures (HBP) and export promotion schemes (except Service Exports from
India Scheme) have been extended by one year from 31 March 2020 to 31 March
2021. Decision on continuation of Service Exports from India Scheme (SEIS) will
be taken and notified subsequently.
Category of services eligible
under (SEIS) and rate of reward on the said services for the period 1 April
2019 to 31 March 2020 will be notified separately.
Exemption from payment of
integrated tax and compensation cess on imports made under Advance
Authorisation (AA) and Export Promotion Capital Goods (EPCG) scheme has been
extended from 31 March 2020 to 31 March 2021.
A similar extension is also
given for imports made by Export Oriented Units (EOU), Electronic Hardware
Technology Park (EHTP), Software Technology Park (STP) and Bio-Technology Park
(BTP).
For all Duty-Free Import Authorisation
(DFIA), AA and EPCG authorizations, where validity for import of goods and
export obligation period (wherever applicable) is expiring between 1 February
2020 and 31 July 2020, extension of six months from the date of expiry has been
provided.
Amendments are also made in HBP
for extending due dates for filing various applications and refund claims.
Extension of various due dates
in respect of duty credit scrips, refunds and reimbursements is likely to
benefit exporters who faced challenges in meeting statutory timelines due to
disruption caused by COVID-19.
Authorisation holders whose
exports are impacted due to current global situation would benefit from the
extension of export obligation period.
Having regard to unprecedented
situation, it would be beneficial for the industry if the government considers
granting extension also in all such cases where time limit with late cut falls
between March 2020 to June 2020.
It is pertinent to note that the
government has approved scheme for Remission of Duties or Taxes on Export
Product (RoDTEP) which will be introduced in a phased manner, replacing the
existing Merchandise Export from India Scheme (MEIS).
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