No:CLE/HO/Pol/Circular/2016

October 21, 2016

Members of the Council,

Sub:    Guidelines for Issuance of Duty Credit Scrips under Incremental Export Incentivisation Scheme (IEIS) for Quarterly period (01.01.2013 to 31.03.2013) in pursuance of Trade Notice 04 dated 05.05.2016

Dear Sir,

Kindly refer to our earlier circular dated 17/6/2016 (given below) on the above subject, stating that Regional Authorities (RAs) of DGFT can process the cases of applications for Incremental Export Incentivisation Scheme (IEIS), without imposing any cap on account of earlier stipulation of restricting growth to 25% or incremental value of Rs.10 crore in value, whichever is less. The DGFT has again issued a Trade Notice No.16/2016 dated 14/09/2016 stating the following.

1.      All the concerned RAs (Regional Authorities of DGFT) now have facility to re-open the files in such cases for issue of the balance claim, pending after deducting the initial scrip value and process such cases for issuance of scrips for the balance entitlement after ensuring taking due diligence as indicated in the Trade Notice 4/2016 dated 05.05.2016 and earlier instructions on scrutiny of claims.

2.      RAs shall exercise due diligence while processing such claims by following guidelines of greater scrutiny as prescribed in Public Notice No.28 dated 25.09.2013 to check claims having high growth percentage and/or value and against irregularities if any. Where the export growth or total claim under the scheme is excessive and out of trend, RA would check claims in detail, including where necessary by seeking help from Customs, DRI etc. In this regard Notification No.27 dated 28.12.2012 may also be carefully seen, in addition to other relevant FTP/HBP provisions.

3.      Inter alia, transfer of export performance from any other IEC holder is not permitted under the scheme as per Para 3.14.4 (d) of FTP 2009-14.                   Also, filing of applications with different export performance under different file numbers, except as prescribed in ANF 3F is a clear violation of procedure.

Detailed guidelines are given in the aforesaid trade notice No.16 which may be kindly referred.

Members may approach the local DGFT offices for more details on pending IEIS applications and for claiming balance IEIS Scrip value wherein the earlier scrip was issued restricting growth to 25% or incremental value of Rs.10 crore in value, whichever is less

Thanks & regards,

R.Ramesh Kumar

Executive Director

 

NO.CLE-HO-POL/CIRCULAR/13-14

June 16, 2016

Members of the Council

Sub : Incremental Exports Incentivisation Scheme under previous Foreign Trade Policy 2009-14 – Issue of Clarification by DGFT

Dear Member

What is this circular about ?

This circular is about clarification recently issued by office of DGFT stating that Regional Authorities (RAs) of DGFT may process applications under incremental exports incentivization scheme without imposing any cap on account of the earlier stipulation of restricting growth to 25% or incremental growth of Rs.10 crore in value, whichever is less.

Introduction

As members are aware, the incremental Exports Incentivisation Scheme was announced in Dec. 2012 under the previous Foreign Trade Policy 2009-14. Under this scheme, the exporters are eligible for 2% duty credit scrip on the FOB value of exports to USA, Europe and Asia (excluding Singapore, UAE and Hong Kong) on the incremental growth during the period 01.01.2013 to 31.3.2013 compared to the period from 01.01.2012 to 31.3.2012.

This scheme was extended for the year 2013-14 on annual basis in the Annual Supplement 2013-14 to Foreign Trade Policy 2009-14 notified during April 2014. Also, exports to the following 53 notified countries in Latin America and Africa were added under this scheme vide DGFT Public Notice No. 3 (RE 2013/2009-14 dated 18^th April 2013.

African Countries	Latin American Countriess
Namibia	Trinidad
Botswana	Paraguay
Swaziland	Costa Rica
Lesotho	Haiti
Burkina Faso	Netherland Antilles
Mali	Nicaragua
Niger	EL Salvador
Gabon	Bolivia
Gambia	Cuba
Mauritania	Jamaica
Equatorial Guinea	Suriname
Guinea Bissau	Belize
Cape Verde IS	Guyana
Sao Tome	Guadeloupe
St. Helena	Martinique
Rwanda	Barbados
Burundi	Dominica
Chad	Virgin IS US
C Africa REP	Antigua
ReunionReunion	Bermuda
Seychelles	FR Guiana
Comoros	ST Lucia
Canary IS	Grenada
	ST Kitts N A
	BR Virgin IS
	Cayman IS
	Turks C IS
	ST Vincent
	Montserrat
	Falkland IS

The 2% incremental scrip was only for incremental exports achieved during 2013-14 as compared to the year 2012-13 for notified countries.  This scrip is transferable and can be used for domestic sourcing and for payment of Service Tax.

 

Clarification recently issued by Office of DGFT

The Directorate General of Foreign Trade has recently issued a Trade Notice No. 4/2016 dated 5^th May 2016 stating the following.

 

DGFT Notification No.44/(RE-2013)/2009-14 dated 25.09.2013 (COPY ENCLOSED) states the following.

i) Benefit of Incremental Export Incentivisation Scheme for the last quarter of 2012-13 will  be limited to 25% growth or Incremental growth of Rs.10 crores in value, whichever is less.

ii)     Claims in excess of this value will be subjected to greater scrutiny by Regional Authority.

• On 23.9.2014, a clarification was issued by DGFT to Regional Authorities of DGFT stating that para (i) and (ii) in DGFT Notification No.44/(RE-2013)/2009-14 dated 25.09.2013 are independent. The limiting of claim was clearly mentioned in the first sub-para of Notification which fixes the upper limit of grant benefit. The second sub-para in the Notification only direct RAs to exercise caution while dealing with cases of incremental growth of export under the scheme. It does not entitle any applicant to higher levels of benefits under the scheme.

 

• The Notification No. 44 dated 25.9.13 on the issue of limiting the entitlement has been challenged by many exporters in different high courts. In view of the decision of various High Courts, the matter has been re-examined in consultation with the Department of Legal Affairs and accordingly, the following instructions are hereby issued for processing the cases of the IEIS claims by RAS.

 

1.      In supersession of clarification dated 23.9.14, RAs may further process the cases without imposing any cap on account of the earlier stipulation of restricting growth to 25% or incremental growth of Rs.10 crore in value, whichever is less.

2.      RAs must, however, exercise due diligence while processing such claims by following guidelines of greater scrutiny as prescribed in Public Notice No. 28 dated 25.9.2013 (copy enclosed for ready reference of members) to check claims having high growth % and/or value and against irregularities. In this regard, the Policy Notification No. 27 dated 28.12.2012(copy enclosed for ready reference of members) may also be carefully seen, in addition to other relevant provisions. Inter alia, transfer of export performance from any other IEC holder was not permitted under the scheme as per Para 3.14.4.(d). Similarly disclaimer provision of para 3.17.10(b) was also not admissible as per para 3.14.4.(c)

3.      If in any case there are doubts/ suspicions about the authenticity/genuineness of the increments in aspects like turnover /growth etc., the matter may be referred to investigating agencies like DRI etc., and the case may be finalized after taking into account their report.

4.      All these cases should be approved by Head of the Office

5.      The above stipulations will not be a bar to the RAs in scrutinising small value claims also, where there is prima facie case to do so.

6.      It is pertinent that no right is vested in favour of the claimant when impropriety fraud has been detected.

Members may please note the above.

 

R.Ramesh Kumar, I.A.S.

Executive Director

Council for Leather Exports
Attachments
DGFT Public Notice No. 3 of 2013 DGFT Public notice no. 28 of 2013 DGFT Notification no. 43 of 2013 DGFT Notification no. 44 of 2013 DGFT Notification no. 27 of 2012 TN0416 Trade Notice No.16