Foreign Trade Policy (FTP) 2015-20 – Key Recent Updates till 16.04.2020

Summary Index of Contents

1. Extension of FTP beyond 31st March 2020
2. Eligibility of Service Export from India Scheme for F.Y 2019-20 and Notifying the scheme for F.Y 2020-21 – reg
3. Imports under Advance Authorization – duty exemption extended till 31^st March 2021
4. Extension of due date for filing of SEIS application for the F.Y 2018-19 – reg
5. Extension of due date for filing of MEIS application – reg
6. Validity of Status Holder certificate
7. Extension of compliance due date relating to Advance Authorizations and EPCG Authorizations
8. Extension of validity of RCMC certificate beyond 31.03.2020 – reg
9. Manner of Continuation of Merchandise Exports from India Scheme (MEIS) for shipments on or after 01.04.2020 and Introduction of the Remission of Duties and Taxes on Exported Products (RoDTEP) Scheme

1. Extension of FTP beyond 31^st March 2020.

(Notification No. 57/2015-20 dated 31^st March 2020 issued by DGFT)

The Foreign Trade Policy (FTP) 2015-2020 and Handbook of Procedures (HBP) which was valid till 31st March 2020, has been extended by one year till 31st March 2021.

In para 1.01(HBP), the phrase “shall remain in force up to 31st March, 2020 unless otherwise specified” is substituted by the phrase “shall remain in force up to 31st March, 2021 unless otherwise specified.”

H&A comment –Foreign Trade Policy 2015-20 (FTP) was valid only up to 31.03.2020. However, due to COVID-19 pandemic, Ministry of Commerce and Industry has extended the applicability of the policy for a further period of one year i.e., up to 31.03.2021. This is a welcome step.The Government is not ready with the new policy and had no time to implement the policy even if they were ready.

2. Eligibility of Service Export from India Scheme for F.Y 2019-20 and Notifying the scheme for F.Y 2020-21 – reg.

(Notification No. 57/2015-20 dated 31^st March 2020 issued by DGFT)

The service categories eligible under the scheme and the rates of reward on such services rendered

w.e.f. 1^st April 2019 to 31^st March 2020 shall be notified separately in Appendix 3 X. For the services rendered w.e.f. 1^st April 2020, the decision on continuation of the scheme will be taken subsequently and notified accordingly.”

Eligibility for SEIS:

H&A comment – An explanation being added to para 3.08 (a) of FTP specifying that the categories of services and rate for SEIS for F.Y 2019-20 would be notified separately and for F.Y 2020-21 decision on continuation of the SEIS scheme would be made. Notifying SEIS for F.Y 2019-20 is a boost for service sectors and keeping the decision on hold about continuing/extending the same benefit for F.Y 2020-21 could be an issue with the dyfunctional WTO. { India is in appeal}

 

3. Imports under Advance Authorization – duty exemption extended till 31^st March 2021.

(Notification No. 57/2015-20 dated 31st March 2020 issued by DGFT)

Para 4.14 of FTP states,’’ Imports under Advance Authorization are exempted from payment of Basic Customs Duty, Additional Customs Duty, Education Cess, Anti-dumping Duty, Countervailing Duty, Safeguard Duty, Transition Product Specific Safeguard Duty, wherever applicable. Import against supplies covered under paragraph 7.02 (c), (d) and (g) of FTP will not be exempted from payment of applicable Antidumping Duty, Countervailing Duty, Safeguard Duty and Transition Product Specific Safeguard Duty, if any. However, imports under Advance Authorization for physical exports are also exempt from the whole of the integrated tax and Compensation Cess leviable under sub-section (7) and sub-section (9) respectively and such imports shall be subject to pre-import condition. Imports against Advance Authorizations for physical exports are exempted from Integrated Tax and Compensation Cess up to 31.03.2020 only.’’

DGFT vide Notification No. 57/2015-20 dated “31.03.2020” has extended such exemption till 31^st March 2021.

H&A comment – The Government has extended exemption from payment of IGST to advance authorization holders till 31.03.2021 which otherwise originally was only till 31.03.2020 only.Welcome decision.

4. Extension of due date for filing of SEIS application for the F.Y 2018-19 – reg.

(Public Notice No: 67/2015-2020 dated 31^st March 2020)

The last date for filing annual claims under SEIS is 12 months from the end of the relevant financial year of the claim period, which for the F.Y 2018-19 claims is expiring on 31.03.2020, has been extended to 31^st December 2020. Further, the last date of submission of application, for the purpose of late cut, would be taken as that extended as above.

H&A comment – The due date for filing of SEIS application for the F.Y 2018-19 has been extended for a further period of 9 months without any late fee, i.e., up to 31.12.2020. Hence the last date for filings SEIS applications for the FY 2016-17 and Y 2017-18 with late fee would be 31.12.2020.

5. Extension of due date for filing of MEIS application – reg.

(Public Notice No: 67/2015-2020 dated 31^st March 2020)

The last date for filing MEIS claims is one year from the let export order (LEO) date of each shipping bill without late cut and another two years with the imposition of a late cut. The last date of filing MEIS claims without late cut for all shipping bills where the LEO date is falling between 1^st February 2019 to 31^st May 2019, maybe filed within 15 months instead of 12 months.

H&A comment – The time limit for filing MEIS claim for those shipping bills for which due date is falling between 1^st February, 2020 to 31^st May, 2020, has been extended for a period of 3 months.

6. Validity of Status Holder certificate

(Public Notice No: 67/2015-2020 dated 31^st March 2020)

The validity period of all status holder certificates issued under FTP 2015-20 to an IEC holder has been extended up to 31^st March 2021.

H&A comment – In general the Status Holder Certificate under FTP 2015-20 is valid up to 31.03.2020. This is also extended to 31.03.2021.

7. Extension of compliance due date relating to Advance Authorizations and EPCG Authorizations.

(Public Notice No: 67/2015-2020 dated 31^st March 2020)

1. In respect of those Advance Authorizations and EPCG Authorizations wherein the extended Export Obligation period has either expired or is expiring between 1^st February 2020 to 31^st July 2020, the Export Obligation Period has been extended for further six months from the date of expiry.
2. In respect of those Advance Authorizations and EPCG Authorizations wherein the import validity period has either expired or is expiring between 1^st February 2020 to 31^st July 2020, the import validity period has been extended for further six months from the date of expiry.
3. In respect of those EPCG Authorizations wherein block period to fulfil the Block-wise export obligation has either expired or is expiring between 1st February 2020, to 31st July 2020, the Block period has been extended for further six months from the date of expiry.
4. In respect of those EPCG Authorizations wherein the time period to produce the Installation Certificate before the R.A. concerned has either expired or is expiring between 1st February 2020, to 31st July 2020, the time period has been extended for further six months from the date of expiry.

H&A comment - All the compliance relating to Advance Authorizations and EPCG Authorizations which is expiring between 1^st February 2020, to 31^st July 2020 has been extended for a further period of six months from the date of expiry for those Authorizations.

8. Extension of validity of RCMC certificate beyond 31.03.2020 – reg.

(Trade notice No. 60/2015-20 dated 31^st March,2020 issued by DGFT

Under para 2.55 & 2.56 of FTP read with paras 2.91 – 2.95 of HBP, 2015-20. Export Promotion Councils (EPC’s) have been issuing RCMC’s to its members. Given the current situation due to the COVID-19 pandemic, exporters may find it challenging to get re-validations of their RCMCs from their respective councils.

In view of the above, it has been decided that Regional Authorities (R.A.’s) of DGFT will not insist on valid RCMC (in case the same has expired on or before 31.03.2020) from the applicants for any incentive/authorizations till 30^th September 2020.

EPCs will collect the applicable fees for the F.Y 2020-21 on the restoration of normalcy.

H&A comment - We suggest the trade and industry who has cash flow problems due to COVID-19 and not able to renew the RCMC, to speed up the process of applying incentives/authorizations under FTP

 2015-20 on or before 30.09.2020. However, every exporter has to pay the applicable fees for the renewal of RCMC certificate for the F.Y 2020-21 to EPCs after the situation becomes normal.

9. Manner of Continuation of MEIS for shipments on or after 01.04.2020 and Introduction of the RoDTEP Scheme

(Trade Notice No. 03/2020-21 dated 15th April 2020 issued by the DGFT)

With the approval of the RoDTEP scheme by Cabinet on 13th March 2020, to replace the ongoing MEIS scheme as publicized vide PIB Press Note dated 13th March 2020, this Directorate had been receiving queries from the members of the trade, as to in what manner benefits under MEIS will be available under the FTP beyond 31.03.20, the then envisaged end date of the FTP 2015-20, which has since been extended till 31.03.2021. It is clarified, without prejudice and subject to changes that may be deemed necessary in public interest from time to time, that:

1. Benefits under MEIS for any item/tariff line /H.S. Code currently listed in Appendix 3B, Table 2 (MEIS Schedule) will be available only up to 31.12.2020;
2. Prior to 31.12.2020, as and when an item/tariff line/H.S. code is notified to be covered under RoDTEP Scheme, it would at the same time be removed from coverage under MEIS;
3. Detailed operational framework for the Scheme for Remission of Duties and Taxes on Exported Products (RoDTEP) will be notified separately in consultation with Department of Revenue, Ministry of finance.