Foreign Trade Policy
In 1992, the government enacted Foreign Trade (Development & Regulation) Act to facilitate import and enhancing exports from India. Export of goods from India and Import of goods into India is governed by the Foreign Trade Policy. DGFT i.e. the Director General of Foreign Trade is the administrative body which governs the foreign trade in India.
With the objective of selling India as a manufacturer’s friendly country and facilitating exports, the 2015-20 Policy was revamped, and new schemes like the SEIS scheme and the MEIS scheme was introduced. In addition to reducing the Export Obligation for domestic procurement under EPCG scheme, duty credit scrips were made freely transferable and usable for payment of customs duty, excise duty and service tax various duties.
With the mid-term changes being made in the Policy in September, 2017, the Government is trying to further integrate ‘Make in India’ and ‘Digital India’ to the new Policy.
Importer Exporter Code
Importer Exporter Code (IEC) is a registration required for persons importing or exporting goods and services from India. IEC is issued by the Directorate General of Foreign Trade (DGFT), Ministry of Commerce and Industries, Government of India.
The IEC is also required for availing benefits under schemes like MEIS or SEIS. IEC when issued can be used by the entity throughout its existence and doesn’t require any renewal or filing.
Once the application is submitted, the DGFT processes the application and issues the IEC to the entity within 15-20 working days
The exporters are entitled for import of new capital goods under this scheme without payment of custom duties. The exporter can also purchase domestic capital goods under this scheme by obtaining Invalidation letter. The exporter is required to achieve pre-defined level of export which is generally specified in “number of time of duty saved by the exporter”.
We have in-house EPCG scheme experts who will assist you in receiving these benefits for your business.
Duty exemption schemes enable duty free import of inputs required for export production. An Advance Licence is issued as a duty exemption scheme.
An Advance Licence is issued to allow duty free import of inputs, which are physically incorporated in the export product (making normal allowance for wastage). In addition, fuel, oil, energy, catalysts etc. which are consumed in the course of their use to obtain the export product, may also be allowed under the scheme.
Goods exported under Advance Licence may be re-imported in the same or substantially the same form subject to the conditions specified by the Department of Revenue from time to time.