Industry & Economy
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Exports & Imports
Exports under deferred payment deals to get advance licence benefits
K.R. Srivats
New Delhi
,
Jan. 21
EXPORTS made under deferred payment or suppliers' line of credit contract are now entitled for benefits under the advance licence scheme (ALS).
The benefits would, however, be available only for contracts that are backed by a cover from the Export Credit Guarantee Corporation (ECGC). The Commerce Ministry's move to confer ALS benefits to exports made under deferred payment contracts is likely to spur project exports from the country, informed sources said.
Exports made against Government of India/ Exim Bank's line of credit are already entitled for benefits under the ALS. An advance licence allows duty-free import of inputs that are physically incorporated in the export product (making normal allowance for wastage).
Advance licences are usually issued on the basis of the inputs and export items given under the Standard Input and Output Norms.
The Department of Commerce has also amended the Exim procedures to provide that exports made against the Government of India/Exim Bank line of credit and exports made under the deferred payment/suppliers line of credit (backed by ECGC cover) would be entitled for the benefits under the Duty Free Replenishment Certificate (DFRC) scheme.
Further, such exports would also be counted for fulfilment of export obligation under the Export Promotion Capital Goods scheme.
While advance licence is a duty exemption scheme that enables duty-free import of inputs required for export production, DFRC is a post-export duty remission scheme that allows duty-free replenishment of inputs used in the export product. Meanwhile, the Government has amended the Exim procedures to stipulate that items reserved for imports by State Trading Enterprises (STEs) cannot be imported against advance licences.
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