Subsidies are not adversely affected

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: We are exporters of brassware handicrafts. Instead of supporting the exporters, the government has been reducing the export benefits like DEPB and Drawback rates . With the dollar depreciating against the rupee, net realisations have also decreased. Wouldn’t it affect exports?

— Manoj Jain, Hindustan Exports, Moradabad

DEPB and Drawback are not ‘export benefits’. These are mechanisms to refund the duties incurred during production of an export product. Therefore, a reduction in import duty would trigger a corresponding reduction in DEPB or duty drawback. But it is desirable that changes are made public in advance, so that exporters could take that into account while pricing for future. To guard against the fall of dollar, for short-term export contracts, you could invoice in Euro or more stable currencies. For long-term contracts, it is advisable to use a range of services offered by banks against currency fluctuations such as hedging.

We manufacture bicycle spokes. We are often asked about the ITC HS code. How can we locate it and what is its relevance?

— Satnam Singh, Prince Engg., Ludhiana

ITC HS code refers to an internationally accepted classification system of goods based on numbers. The cycle spokes manufactured by you, for example, has the number 87149220. The first two digits denote the chapter heading, which in your case is Vehicles (other than railway/ tram way and parts thereof). Subsequent classification with four, six, eight, or ten digits refines the product further. Indian customs and excise tariffs are based on the 8-digit ITC based classification. The number is indispensable while paying excise or customs duties, or to quote prices internationally, or to examine the import or export data. You could locate the ITC HS code through any customs or excise tariff manual. You could also do it online: http://commerce.nic.in/eidb/ Default.asp or http://www. infodriveindia.com/tradelaw/exim/hs/default.asp.

Could there be a negative impact of free trade agreements being signed with several countries such as Thailand and Singapore?

— P Rajendran, Swati Auto Ltd, Chennai