Passe: Bank Guarantee On Duty-free Inputs

New Delhi, Aug 10 | Updated: Aug 11 2004, 05:30am hrs
Harassment of exporters could soon be history. Sources said the forthcoming National Foreign Trade Policy (NFTP) formerly known as the Exim Policy could give exporters a two-fold respite.

One, exporters wont have to give bank guarantees for most duty-free procurements that come with an export obligation.

Two, they wont have to file first investigation reports (FIR) for lost documents.

A commerce ministry official said the NFTPs message will be that the government doesnt think exporters are thieves. Most exporters are genuine, he said.

Exporters need bank guarantees for a number of procurements, including importing goods using advance and replenishment licences, buying excisable inputs without paying excise duties and importing goods under the export promotion capital goods (EPCG) scheme. The guarantees are supposed to act as safeguards against exporters defaulting on export obligations. They need to take this undertaking in return for duty exemptions.

Udyog Bhavan said instead of giving bank guarantees, exporters will now have to give only legal undertakings stating fulfilment of export obligation, thereby reducing paper-work and precluding the need to lock up money with banks.

The facility is available only to status-holding export houses exporting goods worth above Rs 1 crore. The NFTP will exempt all exporters from providing bank guarantees.

On doing away with filing an FIR for lost export documents, officials said exporters could ask for duplicates by submitting an application. Theres no point in asking exporters to file an FIR every time they lose a document. If they supply the ministry with relevant details in their application, duplicates can be provided, they said.

However, loss of documents like the duty entitlement pass book (DEPB) certificate which is as good as hard cash will still need FIRs.