Pharma exporters stand to gain from Commerce ministry’s amnesty scheme

The Union Commerce ministry’s Amnesty Scheme will be a big opportunity for pharma exporters in the country as it will provide the much-needed relief to exporters, who were unable to meet their obligations under Export Promotion Credit Guarantee (EPCG) and Advance Authorisations apart from being burdened by high duty and interest costs associated with pending cases. EPCG scheme allows an exporter to import capital goods, including spares for pre-production, production and post-production at zero customs duty.

The Commerce ministry announced a new Foreign Trade Policy (FTP) on March 31. Among other things, the policy included the amnesty scheme for exporters for a one-time settlement of default in export obligation by those holding advance and EPCG (export promotion for capital goods) authorisations. Moreover, all pending defaults in meeting the Export Obligation (EO) of authorizations-para (1)-can be regularised by the authorization holder on payment of all customs duties that were exempted in proportion to the unfulfilled EO and interest at the rate of 100% of such duties exempted. However, no interest is payable on the portion of additional customs duty and special additional customs duty.

The Directorate General of Foreign Trade (DGFT) had issued the scheme for one-time settlement of default on April 1. Authorisations issued under Advance Authorisation Scheme (all variants) and EPCG Scheme (all variants) issued under Foreign Trade Policy, 2009-14 till 31.03.2015 are covered under the scheme.

For authorizations issued under Advance Authorisation Scheme (all variants) and EPCG Scheme (all variants) issued under Foreign Trade Policy, 2004-2009 and before, the coverage is limited to those authorizations whose EO period (original or extended) was valid beyond August 12, 2013.

The amnesty scheme is in line with the ‘Vivaad se Vishwaas’ initiative of the Union Finance ministry, which sought to settle tax disputes amicably. The amnesty scheme will be available only up to September 30.

The Pharmaceuticals Export Promotion Council of India (Pharmexcil), which played a crucial role in boosting pharmaceutical exports, has urged its member companies to avail of the scheme for getting relief from several obligations. Authorization holders, who are keen on availing the scheme benefits, can register themselves on https://www.dgft.gov.in.

Thereafter, if entire authorization is under default, the applicants can pay customs duty plus interest with the jurisdictional customs authorities and submit proof thereof to their respective DGFT regional authority. If there is partial default, the regional authority on the basis of the applicant’s specific request and application for Export Obligation Discharge Certificate along with the necessary supporting documents, and fulfill all other parameters.

Any authorisation holder choosing to avail the benefit must complete the registration process by June 30. It is a good scheme that announced by the Union Government and exporters should utilize the opportunity to settle all their pending cases to start afresh.