Circular No.  ES/ 1 / 2007-08                                                 April 20, 2007           

To :  Members of the Council

Sub :  Foreign Trade Policy  2004-09 

Dear Sir,

In the Annual  Supplement ( 2007 ) to the Foreign Trade Policy 2004-09 announced on April 19, 2007, the Government has extended the DEPB scheme by one year i.e upto March 31, 2008. The much awaited provision for the exemption of Service tax on services rendered abroad to facilitate exports has been  incorporated in the amended version .  The Focus Market  Scheme has also been enlarged with the inclusion of 16 more Countries under the scheme.

A copy of the Highlights of the Annual supplement to the Foreign Trade policy is reproduced below for your reference.

We request you to kindly send us your suggestions , if any , for the improvement on the  policy provisions - wherever required - by Fax /E-mail / courier  to enable us to take it up suitably with the Government .

Thanking You 

A.RAVINDRA KUMAR

DEPUTY DIRECTOR

HIGHLIGHTS OF THE ANNUAL SUPPLEMENT (2007)

TO THE FOREIGN TRADE POLICY 2004-09

  1. Exemption from duty on machinery and equipment for effluent treatment plants for handlooms has been allowed.

  1. DEPB Scheme extended up to 31/3/2008. A new scheme to replace DEPB to be finalized. Export Promotion Councils and Commodity Boards to submit their suggestions to the Government regarding the new alternative scheme.

  1. Focus Market Scheme and Focus Product Scheme expanded to include 16 more countries/new items. Funds allocation increased to Rs. 2000 crores for 2007-08 from Rs.650 crores.

  1. Services rendered abroad to facilitate exports to be exempted from Service tax.

  1. Service tax on services rendered in India and utilized by exporters would be exempted/remitted. Remission mechanism would be institutionalized after working out modalities with Department of Revenue.

  1. Duty on fuel and 4% Special Additional Duty (SAD) to be factored in DEPB.

  1. Categorization of exporters as one to five Star Export Houses has been changed to Export Houses & Trading Houses with rationalization and change in export performance parameters.

  1. 100% EOUs not availing direct tax benefits would also get the benefits under Focus Market Scheme and Focus Product Scheme.

  1. To promote exports of High Tech Products an export promotion scheme has been launched to provide for Duty credit of 10% as incentive to the exporters on incremental export growth.

  1. Issue of EPCG for import of spares, tools and spare refractory would be allowed for existing imported plant & machinery (though not imported under the EPCG Scheme).

  1. Waiver of outstanding Export obligations can be considered where the exporter is unable to fulfill export obligation due to force majeure or other unforeseen circumstances (under EPCG).

  1. Block-wise fulfillment of export obligation under EPCG dispensed with.

  1. Wherever more than one EPCG authorizations are issued concurrently, fresh EPCG authorization would build upon last required average export obligation only (incorporating the previous EPCG obligation) notwithstanding actual achievements.