The customs department has been pressurising exporters to pay four per cent special additional duty (SAD) on imports against the duty entitlement pass book scheme (DEPB), despite the recent finance ministry notification exempting DEPB imports from SAD.

"India's exports may fall far short of expectations as a result of the continuing harassment of exporters by the customs and revenue departments," said P K Shah chairman of the engineering export promotion council (EEPC).

"This high-handedness on the part of customs officials will lead to blockage of funds and affect the country's exports, as exporters are being forced to deposit large sums of money for clearing consignments," Shah warned.

Shah blamed the revenue, customs and excise departments for causing delays and subjecting exporters to innumerable hassles."These departments are onlyinterested in higher revenues and are not at all concerned about export promotion schemes", he said.

Meanwhile, the EEPC has made a representation to commerce secretary P P Prabhu, urging him to initiate steps to resolve the issue. "Though attempts have been made to simplify export procedures by various export promotion schemes, the impact remains negligible as inter- departmental wrangles cripple exporters," Shah claimed.

Addressing media-persons here, Shah said that the government should lay greater emphasis on ensuring liberty for exporters and reducing procedural bottlenecks on imports related to value-added exports.

Citing an instance, Shah said that notifications issued by the ministry of commerce are not honoured by the revenue department. "Even public notifications issued from the top level, are misinterpreted by officials at the operating level," he added.

Shah exuded confidence that exports of engineering goods would exceed eight billion dollars by the year 2001 from 4.4 billion dollarsrecorded during 1997-98, but hastened to add that, "the biggest challenge before domestic engineering firms was to modernise and create an export surplus".

In addition, the government will have to take various steps including the zero duty import of capital goods upto Rs one crore and above, besides enhanced financial assistance from Indian financial institutions to help realise the ambitious export targets, he said.

Insight -- exports in "sad" trap

The government is unable to get its administrative act together in support of exports. Notifications issued by the commerce ministry are ignored by the revenue department under the ministry of finance. The customs department even dishonours the notification of its parent, the finance ministry, in the case of the waiver of special additional duty (SAD) on imports under the duty entitlement passbook scheme for exporters. Different arms of government are working at cross purposes while exports flag.