Government extends FTP 2015-2020 till 31 March 2021 and announces various relief measures

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).