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Amnesty scheme sought for export obligation defaults

Our Bureau

CALCUTTA, Aug. 10

THE Foreign Trade Association (FTA) has in a recent communication to the Union Minister of Commerce and Industry, Mr. Murasoli Maran, sought early introduction of a `Niryat Samadhan Scheme' to cover all cases of defaults in fulfilment of export obligatio ns against advance licences pending as on March 31, 2000.

According to Mr. A.P. Banerjee, Chairman of FTA, an amnesty scheme, on the lines of the KVSS (Kar Vivad Samadhan Scheme), may help reduce litigation and resolve the problems of exporters with regard to pending export obligations, and/or payment of duties .

It is stated that an amount of Rs. 54,000 crores is locked up in direct taxes in over five lakh cases all over the country, besides Rs. 12,000 crores (1.7 lakh cases) in excise and customs, and Rs. 12,000 crores in various forms of litigation between the Union Government and the public sector units.

In case the licence holder fails to complete the export obligation or fails to submit the relevant information/documents, the licensing authority can refuse further licences, and also initiate penal action as per law.

FTA has pointed out that defaults in fulfilment of export obligations (with regard to advance licences) have been mainly due to vagaries of international trade and financial constraints faced by exporters due to inadequate banking support.

Alternatively, FTA has suggested a further time period of 18 months to all exporters having pending export obligations as on March 31, 2000 for deposit of dues.

Mr. Banerjee said exporters should be allowed to regularise their cases within this timeframe, which should be free of any harsh penal charges or bank guarantee conditions, which deters export promotion. An appropriate undertaking from the exporters conc erned on achievement of additional targets, if imposed, may be considered as adequate security.

FTA has pointed out that the recently-constituted Customs and Excise Settlement Commission (as facilitated by the Finance Act of 1998), though welcome, has not enthused industry. It is suggested that early introduction of a structured amnesty scheme may help the Revenue Department garner exporters' support, which, in turn, may give a boost to revenue collection.

The period for export fulfilment under an advance licence begins from the date of issue of licence, and has to be fulfilled within 18 months, except for supplies under advance licence for deemed exports to projects/turnkey projects in India and abroad wh ere the obligation has to be fulfilled.

The regional licensing authority usually grants to the licensee one extension of the export obligation period for six months from the date of expiry of the original period, subject to payment of a composition fee of one per cent on the unfulfilled f.o.b. export value. Further extension may be considered by the authority on payment of five per cent composition fee.