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K.R.Srivats

New Delhi April 6 The Government's plan to introduce export valuation rules may face rough weather, with the exporting community deciding to oppose the proposal tooth and nail.

The Finance Ministry had recently come up with draft export valuation rules to ensure that there was no misuse of the existing duty entitlement pass book (DEPB) or drawback schemes and also to curb money laundering through merchandise export activities.

"There should be no question of any export valuation rules. We are opposed to any such move. The customs duties have already come down and minimised scope for misutilisation of schemes like DEPB or drawback. Moreover, the current environment does not incentivise overvaluation of exports," a cross section of the exporting community told Business Line.

They apprehend an increase in transaction costs from the proposed rules. Exporters point out that the existing DEPB and drawback schemes have safeguards like value caps.

There is also a condition that the rate of entitlement should not exceed present market value of the product, sources said.

The Finance Minister, Mr P. Chidambaram, had in Budget 2007-08 announced that "transaction value" and "not deemed value" would be the basis for valuation of exports. The transaction value is to be determined in accordance with the rules to be framed in this regard.

Currently, the country does not have any specific export valuation rules under customs legislation.

More time

The exporting community have now sought more time from the Finance Ministry for sending its written response on the draft export valuation rules.

The Finance Ministry had earlier announced April 2 as the last date for sending responses to the draft rules.

Sources indicated that some of the industry associations are also not in favour of any export valuation rules.

Besides introduction of export valuation rules, the Government is also looking to amend the existing import valuation rules for customs purposes.

The Government had recently extended the validity of the DEPB scheme to March 31, 2008.

This scheme serves about 30 per cent of the country's merchandise exports in value terms.

India's merchandise exports target for 2006-07 has been pegged at $125 billion.

More Stories on : Exports & Imports | Excise and Customs | Economic Offences

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