Question 1.
\nWrite a short note on Privileges of Star Export House [June 2010 (3 Marks)]
\nAnswer:
\nPrivileges to Status Holders: A Status Holder shall be eligible for privileges as under:
\n1. Authorization and Customs Clearances for imports and exports may be granted on a self-declaration basis.<\/p>\n
2. Input-Output norms may be fixed on priority within 60 days by the Norms Committee.<\/p>\n
3. Exemption from the furnishing of Bank Guarantee for Schemes under FTP, unless specified otherwise anywhere in FTP or HBP.<\/p>\n
4. Exemption from compulsory negotiation of documents through banks. The remittance, however, would be received through banking channels.<\/p>\n
5. Two-star and above Export houses shall be permitted to establish Export Warehouses as per Department of Revenue guidelines.<\/p>\n
6. Three Star and above Export House shall be entitled to get the benefit of the Accredited Clients Programme (ACP) as per the guidelines of CBEC.<\/p>\n
7. The status holders would be entitled to preferential treatment and priority in handling their consignments by the concerned agencies.<\/p>\n
8. Manufacturers who are also status holders will be enabled to self-certify their manufactured goods as originating from India with a view to qualify for preferential treatment under different preferential trading agreements, Free Trade Agreements, Comprehensive Economic Co-operation Agreements & Comprehensive Economic Partnership Agreements. Subsequently, the scheme may be extended to remaining Status Holders.<\/p>\n
9. Manufacturer exporters who are also Status Holders shall be eligible to self-certify their goods as originating from India as per of Hand Book of Procedures.<\/p>\n
10. Status holders shall be entitled to export freely exportable items on a free of cost basis for export promotion subject to an annual limit of \u20b9 10 lakhs or 296 of average annual export realization during the preceding three licensing years whichever is higher.<\/p>\n
Question 2.
\nWrite a short note on Board of Trade under the Foreign Trade (Development & Regulation) Act, 1992 [June 2014 (5 Marks)]
\nAnswer:
\nThe Board of Trade has been given a clear and dynamic role in advising the Government on relevant issues connected with FTP. A process of continuous interaction between the Board of Trade and the Government has been put in place in order to achieve the desired objective of boosting India\u2019s exports. The terms of reference of the Board of Trade include:
\n1. Advising the Government on policy measures for preparation and implementation of both short and long-term plans for increasing exports in the light of emerging national and international economic scenarios.<\/p>\n
2. Reviewing the export performance of various sectors, identify constraints, and suggest industry-specific measures to optimize export earnings.<\/p>\n
3. Examining the existing institutional framework for imports & exports and suggest practical measures for further streamlining to achieve the desired objectives.<\/p>\n
4. Reviewing the policy instruments and procedures for imports & exports and suggest steps to rationalize and channelize such schemes for optimum use.<\/p>\n
5. Examining issues that are considered relevant for the promotion of India’s foreign trade, and to strengthen the international competitiveness of Indian goods and services.<\/p>\n
6. Commissioning studies for the furtherance of the above objectives. Composition: The Government has been empowered to nominate an eminent person or expert on trade policy to be President of the Board of Trade and 25 persons as members, of whom at least ten to be experts in trade policy. In addition, Chairmen of recognized Export Promotion Councils and President or Secretaries-General of National Chambers of Commerce to be ex-officio members.<\/p>\n
Meetings: The Board is required to meet at least once every quarter and make recommendations to the Government on issues pertaining to its terms of reference. The Board of Trade has been empowered to set up sub-committees and to co-opt experts to make recommendations on specific sectors and objectives<\/p>\n
Question 3.
\nWrite a short note on the Advance Authorization Scheme [June 2014 (5 Marks)]
\nAnswer:
\nUnder the Advance Authorization Scheme, the exporter can import raw materials and related inputs by claiming a 100% duty exemption from import duty on the condition that the final product made by using such imported raw material or input is exported.<\/p>\n
Advance Authorization:
\n1. Advance Authorization is issued to allow duty-free import of input, which is physically incorporated in export products (making normal allowance for wastage). In addition, fuel, oil, the catalyst which is consumed\/utilized in the process of production of export product, may also be allowed.<\/p>\n
2. Advance Authorization is issued for inputs in relation to the resultant product, on the following basis:<\/p>\n
3. Advance Authorization can be issued to:<\/p>\n
4. Advance Authorization for pharmaceutical products manufactured shall be issued to manufacturer exporter only.<\/p>\n
5. Advance Authorization shall be issued for:<\/p>\n
6. Advance Authorization for Annual Requirement shall be issued for the items for which Standard Input Output Norms (SION) are notified.<\/p>\n
7. Advance Authorization for Annual Requirement shall not be available in the case of ad hoc norms under FTP.
\nEligibility condition to obtain Advance Authorization for Annual Requirement:<\/p>\n
8. Exporters having past export performance (in at least the preceding 2 financial years) shall be entitled to Advance Authorization for Annual requirement.<\/p>\n
9. Entitlement in terms of CIF value of imports shall be up to 300% of the FOB value of physical export and\/or FOR value of deemed export in preceding financial year or ? 1 Crore, whichever is higher.<\/p>\n
Question 4.
\nWhat are the short-term and long-term objectives of India\u2019s foreign trade policy? [Dec. 2016 (5 Marks)]
\nAnswer:
\nThe FTP is formulated for 5 years time. It may be reviewed every year. The Foreign Trade Policy seeks to achieve the following short term and long term objectives:<\/p>\n
Question 5.
\nDescribe the privileges of Export and Trading House Status Holders in pursuance of the foreign trade policy. [June 2017 (5 Marks)]
\nAnswer:
\nPrivileges to Status Holders: A Status Holder shall be eligible for privileges as under:
\n1. Authorization and Customs Clearances for imports and exports may be granted on a self-declaration basis.<\/p>\n
2. Input-Output norms may be fixed on priority within 60 days by the Norms Committee.<\/p>\n
3. Exemption from the furnishing of Bank Guarantee for Schemes under FTP, unless specified otherwise anywhere in FTP or HBP.<\/p>\n
4. Exemption from compulsory negotiation of documents through banks. The remittance, however, would be received through banking channels.<\/p>\n
5. Two-star and above Export houses shall be permitted to establish Export Warehouses as per Department of Revenue guidelines.<\/p>\n
6. Three Star and above Export House shall be entitled to get the benefit of the Accredited Clients Programme (ACP) as per the guidelines of CBEC.<\/p>\n
7. The status holders would be entitled to preferential treatment and priority in handling their consignments by the concerned agencies.<\/p>\n
8. Manufacturers who are also status holders will be enabled to self-certify their manufactured goods as originating from India with a view to qualify for preferential treatment under different preferential trading agreements, Free Trade Agreements, Comprehensive Economic Co-operation Agreements & Comprehensive Economic Partnership Agreements. Subsequently, the scheme may be extended to remaining Status Holders.<\/p>\n
9. Manufacturer exporters who are also Status Holders shall be eligible to self-certify their goods as originating from India as per of Hand Book of Procedures.<\/p>\n
10. Status holders shall be entitled to export freely exportable items on a free of cost basis for export promotion subject to an annual limit of \u20b9 10 lakhs or 296 of average annual export realization during the preceding three licensing years whichever is higher.<\/p>\n
Question 6.
\nWhat is meant by \u2018Service Export from India Scheme\u2019 (SEIS)? Which services shall be eligible under service export from the India scheme? [Dec. 2017 (5 Marks)]
\nAnswer:
\nServed from India Scheme (SFIS) has been replaced with Service Exports from India Scheme (SEIS).<\/p>\n
Objective: The objective of the Service Exports from India Scheme is to encourage the export of notified Services from India.<\/p>\n
Eligibility:
\n1. Service Providers of notified services, located in India, shall be rewarded under SEIS, subject to conditions as may be notified.<\/p>\n
2. Such service providers should have minimum net free foreign exchange earnings of US$ 15,000 in the preceding financial year to be eligible for Duty Credit Scrip. For Individual Service Providers and a sole proprietorship, such minimum net free foreign exchange earnings criteria would be US$ 10,000 in the preceding financial year.<\/p>\n
3. Net Foreign exchange earnings for the scheme are defined as under Net Foreign Exchange = Gross Earnings of Foreign Exchange minus Total expenses\/payment\/remittances of foreign exchange by the IEC holder, relating to the service sector in the financial year.<\/p>\n
4. If the IEC holder is a manufacturer of goods as well as a service provider, then the foreign exchange earnings and Total expenses\/payment\/ remittances shall be taken into account for the service sector only.<\/p>\n
5. In order to claim reward under the scheme, the Service provider shall have to have an active IEC at the time of rendering such services for which rewards are claimed.<\/p>\n
Question 7.
\nDistinguish between ‘Capital Goods\u2019 and ‘Consumer Goods\u2019 under the Foreign Trade Policy of the Government of India. [June 2018 (5 Marks)]
\nAnswer:
\n\u201cCapital Goods\u201d means any plant, machinery, equipment, or accessories required for manufacture or production, either directly or indirectly, of goods or for rendering services, including those required for replacement, modernization, technological up-gradation, or expansion. It also includes packaging machinery and equipment, refractories for initial lining, refrigeration equipment, power generating sets, machine tools, catalysts for an initial charge, equipment and instruments for testing, research and development, quality, and pollution control.<\/p>\n
Capital goods may be for use in manufacturing, mining, agriculture, aquaculture, animal husbandry, floriculture, horticulture, pisciculture, poultry, sericulture, and viticulture as well as for use in the services sector.<\/p>\n
\u201cConsumer Goods\u201d means any consumer goods, which can directly satisfy human needs without further processing and includes consumer durables and accessories thereof.<\/p>\n
Question 8.
\nCapital goods and spares that have become obsolete\/surplus may be exported, transferred to another Special Economic Zone unit but the law does not permit to dispose of in the Domestic Tariff Area on payment of applicable duties. Comment. [Dec. 2018 (5 Marks)]
\nAnswer:
\nCapital goods and spares that have become obsolete\/surplus, may either be exported, transferred to another EOU\/EHTP\/STP\/BTP\/SEZ unit, or disposed of in DTA on payment of applicable duties.<\/p>\n
The benefit of depreciation, as applicable, will be available in case of disposal in DTA only when the unit has achieved positive NFE taking into consideration the depreciation allowed. No duty shall be payable in case capital goods, raw material, consumables, spares, goods manufactured, processed or packaged, and scrap\/waste\/ remnants\/ rejects are destroyed within the unit after intimation to Customs authorities or destroyed outside unit with permission of Customs authorities.<\/p>\n
Destruction, as stated above, shall not apply to gold, silver, platinum, diamond, precious and semi-precious stones. Thus, it is incorrect to say that capital goods and spares that become obsolete\/surplus cannot be disposed of in the Domestic Tariff Area.<\/p>\n
Question 9.
\nWhat is the object of service export from the India Scheme and what are the eligibility conditions of obtaining benefits of the same under Foreign Trade Policy 2015-2020? [Dec. 2018 (4 Marks)]
\nAnswer:
\nServed from India Scheme (SFIS) has been replaced with Service \u00a7; Exports from India Scheme (SEIS).<\/p>\n
Objective: The objective of the Service Exports from India Scheme is to encourage 21 export of notified Services from India.<\/p>\n
Eligibility:
\n1. Service Providers of notified services, located in India, shall be rewarded under SEIS, subject to conditions as may be notified.<\/p>\n
2. Such service providers should have minimum net free foreign exchange earnings of US$ 15,000 in the preceding financial year to be eligible for Duty Credit Scrip. For Individual Service Providers and a sole proprietorship, such minimum net free foreign exchange earnings criteria would be US$ 10,000 in the preceding financial year.<\/p>\n
3. Net Foreign exchange earnings for the scheme are defined as under:
\nNet Foreign Exchange = Gross Earnings of Foreign Exchange minus Total expenses\/payment\/remittances of foreign exchange by the IEC holder, relating to the service sector in the financial year.<\/p>\n
4. If the IEC holder is a manufacturer of goods as well as a service provider, then the foreign exchange earnings and Total expenses\/payment\/ remittances shall be taken into account for the service sector only.<\/p>\n
5. In order to claim reward under the scheme, the Service provider shall have to have an active IEC at the time of rendering such services for which rewards are claimed.<\/p>\n
Question 10.
\nExplain the objectives of \u2018Foreign Trade Policy under the Foreign Trade Policy for 2015-2020. [June 2019 (4 Marks)]
\nAnswer:
\nThe FTP is formulated for 5 years time. It may be reviewed every year. The Foreign Trade Policy seeks to achieve the following short term and long term objectives:<\/p>\n
Question 11.
\nWhat are the privileges of \u201cStatus Holders\u201d under the Foreign Trade Policy and Procedure of India enumerated under the Foreign Trade Policy 2015-20? [Dec. 2019(4 Marks)]
\nAnswer:
\nPrivileges to Status Holders: A Status Holder shall be eligible for privileges as under:
\n1. Authorization and Customs Clearances for imports and exports may be granted on a self-declaration basis.<\/p>\n
2. Input-Output norms may be fixed on priority within 60 days by the Norms Committee.<\/p>\n
3. Exemption from the furnishing of Bank Guarantee for Schemes under FTP, unless specified otherwise anywhere in FTP or HBP.<\/p>\n
4. Exemption from compulsory negotiation of documents through banks. The remittance, however, would be received through banking channels.<\/p>\n
5. Two-star and above Export houses shall be permitted to establish Export Warehouses as per Department of Revenue guidelines.<\/p>\n
6. Three Star and above Export House shall be entitled to get the benefit of the Accredited Clients Programme (ACP) as per the guidelines of CBEC.<\/p>\n
7. The status holders would be entitled to preferential treatment and priority in handling their consignments by the concerned agencies.<\/p>\n
8. Manufacturers who are also status holders will be enabled to self-certify their manufactured goods as originating from India with a view to qualify for preferential treatment under different preferential trading agreements, Free Trade Agreements, Comprehensive Economic Co-operation Agreements & Comprehensive Economic Partnership Agreements. Subsequently, the scheme may be extended to remaining Status Holders.<\/p>\n
9. Manufacturer exporters who are also Status Holders shall be eligible to self-certify their goods as originating from India as per of Hand Book of Procedures.<\/p>\n
10. Status holders shall be entitled to export freely exportable items on a free of cost basis for export promotion subject to an annual limit of \u20b9 10 lakhs or 296 of average annual export realization during the preceding three licensing years whichever is higher.<\/p>\n