SEZs exempt
from anti-dumping duty
In a bid to allow
exporters to source raw-materials and other inputs at globally-competitive
rates, the government has exempted 100 percent export oriented units (EOUs)
and companies located in special economic zones (SEZs), free trade zones
(FTZs) from anti-dumping and safeguard duties as these imports are used
as inputs for export production.
A similar exemption
has also been made for exempting TRQ (tariff rate quota) imports from safeguard
duty. TRQ is a quantity based duty concession which is nullified if safeguard
duty is imposed. Therefore, the exemption has been introduced. While imports
up to a fixed quantum is allowed under concessional duty through TRQs,
the excess volume is subject to normal duty.
Two-way fungibility
norms for ADR/GDRs finalised
The centre has
finalised the norms for extending two-way fungibility to companies tapping
the ADR/GDR markets. According to officials, companies would be permitted
to maintain the levels of GDRs/ADRs without seeking fresh government clearances.
Companies would
be permitted to reissue ADRs/GDRs up to the level for which they hold a
original clearance without seeking a fresh approval every time a depository
holder divests his holding. Providing two-way fungibility to companies
is one of the milestones on the road to full convertibility. This is also
a tool to manage forex reserves which in April stood at $ 43 billion.
SEZs, EPZs,
EOUs exempted from the provisions of mandatory quality standards
The government
has exempted imports by the special economic zones (SEZs), hundred percent
export-oriented units and units set up in the export processing zones (EPZs)
from the provisions of the mandatory quality standards notified in November
2000. The same dispensation has also been made applicable to imports made
against annual advance licences and those for re-export purpose, according
to a circular recently issued by the Directorate General of Foreign Trade
(DGFT).
Foreign packaged
products have been also brought within the ambit of the provisions of the
Standards and Measures (Packaged Commodities) Rules, 1997 and are required
to give details such as name and address of the supplier, month and year
of packaging the maximum retail price etc.
Under the order
issued under the Foreign Trade (Regulation and Development) Act a list
of 131 imported products had been notified and for those the Indian quality
standards had also been made mandatory. The suppliers were required to
register themselves with the Bureau of Indian Standards. These items included
consumer goods such as batteries, toys and writing instruments.
Both the measures
are fully WTO-complaint and are intended to protect the domestic indsutry
from the fall-out of the removal of quantitative restrictions on the remaining
715 tariff lines.
Companies must
contribute to revival fund
The draft bill
on insolvency laws has recommended that all companies, existing as well
as new, should mandatorily contribute 0.1 percent of their annual turnover
every year to a national fund to be created for revival and rehabilitation
companies.
Also forming
a part of the bill are measures relating to strengthening of the financial
sector to safeguard the interests of the secured creditors - banks and
FIs on the loan recovery front. Benches of National Company Law Tribunal
(NCLT) to deal with insolvency and rehabilitation of sick companies and
comprising of 3 members viz. judicial, technical and a representative of
labour should be set up in all districts which are principal seats of the
High Courts. Benches could also be set up in certain important commercial
districts which do not have a seat of a high court bench. The principal
bench of the tribunal is to be headquartered in Delhi.
Company Law
Appellate Tribunal should be set up with benches at the four metropolitan
cities and other major metros to hear appeals to orders passed by the NCLT.
Any further review of the order could be sought before the Supreme Court
only.
The proposed
insolvency laws shall take winding up of unviable units out of the purview
of the high courts. The bill would be known as Companies (Third Amendment)
Bill, 2001, and it shall replace the Sick Industrial Companies (Special
Provisions) Act, 1985. The BIFR and the CLB would be scrapped once the
NCLT is set up.
Under the proposed
norms, though Sick Industries Companies Act (SICA) would be scrapped, its
crucial provisions, contained in Section 20 and Section 21, would be included
in the proposed Insolvency Act. These Sections deal with recognition of
sickness and the revival and rehabilitation of companies.
The proposed
provisions also include barring companies from changing the opening and
closing date of the financial year, permitting the transfer of shares to
the new owner subject to the new insolvency court's (to be called the National
Company Law Tribunal) approval and removing legal provisions for obtaining
stay from courts.
EXIM Policy
- 2001
The Union Commerce
Minister, Shri Murasoli Maran while announcing the Exim Policy for the
Year 2001 on April 01, 2001 set the goal of achieving 1% share of global
trade by the Year 2004-2005. The Exim Policy has made an attempt to raise
Indian Exports to US$ 75 b by 2004 from the current expected level of $
43 b which works out to approximately 18% growth rate mainly through giving
a boost to agricultural exports, expanding market access through new initiatives
and involving states in these efforts as under:
Agricultural
Export Zones
The policy has
proposed setting of AEZs on the lines of SEZs which would take care of
pre and post harvest treatment and operations, plant protection, processing,
packaging etc. which are vital for exports.
The service
providers will be enitled to EPCG scheme benefits for setting up the necessary
infrastructure facilities. Agri-exporters shall also be entitled for recognition
as a export house/trading house/star trading house/super trading house.
Market Access
Initiatives
Market Access
Initiatives to showcase Indian products in key global markets will have
a corpus of Rs.500 crore in the next fiscal.
Business-cum-trade
facilitation centre and trade portal to be set up in Pragati Maidan, New
Delhi, to build up a comprehensive database for exporters and importers.
Special Economic
Zones (SEZs)
Developers of
these zones have been allowed duty free import or procurement from DTA
for development of SEZs.
The SSI reservation
has also been done away with for the purposes of setting up of units in
these zones. The time limit for realising the export proceeds has been
extended to 365 days against the normal period of 180 days. Units have
been allowed to retain 100% of the proceeds in EEFC account. SEZ developers
given infrastructure status under Income-Tax Act.
Removal of
QRs
Quantitative restrictions
on 715 items removed, 342 are textile products, 147 agricultural including
alcoholic beverages and 226 other manufactured products including automobiles.
War room set
up to monitor any surge in imports on 600 sensitive items and take safeguard
measures including imposition of duties.
QRs to remain
on 600 items broadly in sectors like defence, communication, live animals,
drugs and chemicals.
Annual Advance
License
The AAL facilities
have been extended to deemed exports and intermediate supplies. The entitlement
limit has been increased from 125% to 200% of the FOB value of the preceding
year.
Advance Licences
Duty free import
of fuel has been allowed under SION (Standard Input Output Norms) for sectors
where the cost of the same is more than 10% of the manufacturing cost.
Duty free
replenishment certificate scheme
Validity of
DFRC has been extended from 12 months to 18 months.
EOU/EPZ/EHTP/STP
Units
Highest NFEP requirement
has been fixed at a minimum of 10% and minimum export performance required
has been reduced to 3 times the value of capital goods over 5 years instead
of five times the value. Sub-contracting of production process abroad has
also been permitted. Units would now have to account for duty free goods
in overall terms and not consignment wise.
Others
The facility of
electronic filing of application has been extended to 29 out of the 31
DGFT offices. Electronic filing has been extended to all categories of
licences.
Stiff non-tariff
barriers like left-hand drive and ban on vehicles over three years imposed.
Free import
of second hand capital goods upto 10 years old allowed.
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