Kerala exporters demand simpler paper work in export incentive schemes

Our Bureau Kochi | Updated on August 21, 2019 Published on August 21, 2019

Exporting community in Kerala has demanded that the Commerce Ministry should ensure that paper work involved under export schemes should be simplified.

Kerala exports value-added products such as tea, coffee, cashew, coir products, bamboo and handicrafts.

Some of the issues hampering the export trade could be rectified through suitable amendments in the Revised Foreign Trade Policy for 2020-2025, says Munshid Ali, Member, Customs Trade Facilitation Council, Cochin Customs.

Major market for exporters in the State include West Asia, the Far-East and Africa. But they don’t make use of the Merchant India Export Scheme (MIES) or Service India Export Scheme (SIES) only because of their lack of awareness or poor comfort levels due to complicated paper work.

When exporters use agents, they have to shell out a commission on incentives.

In the case of MIES, after realisation of funds in banks, the exporter starts running in between banks to get the Foreign Inward Remittance Certificate (FIRC), the first hurdle to using the MIES. The remittance might have been made through foreign banks, instead of RBI-approved exchange centres, banks, which charge exorbitant fees. This repels the foreign buyer/importer.

The FIRC has to be submitted to the Director-General of Foreign Trade (DGFT) to claim incentive. On issuance of FIRC, the Bank Realisation Certificate (BRC) is uploaded on the DGFT website.

To avoid this hassle, buyers turn to suppliers elsewhere in China or South-east Asia.

The Calicut Chamber of Commerce & Industry has been getting numerous complaints that some of the new-generation banks are reluctant to issue FIRC citing ‘thankless and tedious work’, Ali said.

The RBI-approved authorised exchange centres charge as low as $10-15 per transaction, which is credited through their corresponding banks in India, some of them new-generation banks.

Here, the exporter is penalised for the banks’ reluctance. This is despite clear instructions in the RBI Circular FEMA 14 (R) /2016 Dated May 02, 2016, Ali said.

These stipulate that the corresponding bank can accept an amount of not exceeding ₹15 lakh per export transaction and the first bank should issue an FIRC to the customer. Once FIRC is issued, the exporter has to cross verify with the Customs Department at the port through which the export was transacted. This may take time and money, for which exporter has to pay for.

This can be avoided if the banking channel is uploaded with Customs Electronic Data Interchange, Ali said.

Published on August 21, 2019
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