The Hindu Business Line : Plea to revamp export norms for powerloom sector

THE Powerloom Development and Export Promotion Council (PDEXCIL) has sought the removal of procedural difficulties relating to various export promotion schemes in the new Exim policy for 2004-07, as also a response to supportive policy initiatives needed for the small-scale sector.

In its strategy paper, the council has called to modify the procedures relating to fulfilment of export obligation under the EPCG scheme and grant of DEPB (duty entitlement pass book) credit.

It sought that necessary amendments in the DGFT's handbook of procedures be carried out so that the fulfilment of the export obligation under the export promotion capital goods (EPCG) scheme is viewed for the entire eight-year obligation period and not for the split-up block years.

The council, in its suggestions, has held the view that the requirement of fulfilling export obligation by `block years' had not been indicated when the EPCG scheme was introduced.

As part of the Exim policy (para 5.1), the period of export obligation for the EPCG is specified as eight years whereas the handbook of procedures (in para 5.8.3) states that penal interest will be charged if the proportion of export obligation fixed for a particular block year is not fulfilled. Since the period of obligation specified is eight years, any penalty should be imposed only if the obligation is not fulfilled within the full eight years and not in any block year, as otherwise it would add to the burden of the exporters, the council has argued.

As for the DEPB credit, the Customs circular, dated September 9, 2002, issued by the Department of Revenue, had set the present market value (PMV) as declared by the exporters or as ascertained by the customs be taken into account where the declared f.o.bvalue is found to be more than the PMV.

In such case, the PMV is taken as the basis for granting the credit. This ran counter to the policy announced, the council said.

The PDEXCIL felt that cotton powerloom textiles export could be raised to $1,214 million (Rs 5,500 crore) for 2004-05 provided suitable policy measures were initiated. Among the supportive policies needed by the powerloom sector are abolition of the Cenvat duty on unprocessed fabrics, extension of lower interest rate on finances for modernisation and maintenance of stable yarn prices.

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