I would like to know if ,under EPCG scheme, services (supervision) and engineering (plans; design) relating to the capital goods can also be included?
thank you for your reply
Lalit Kumar
(Vice President )
(2213 Points)
Replied 10 March 2011
RAMESH KUMAR VERMA
( CS PURSUING )
(43848 Points)
Replied 18 March 2011
YES, YOU CAN ELIGIBLE :-
CHAPTER-6
assessment of CDC services / BENEFITS by other stakeholders
6.1 Measures/ Schemes Being Provided for Development/Promotion of Consultancy Services
6.1.1 "Promotion and Support to Consultancy Services" scheme of Department of Scientific & Industrial Research (DSIR)
DSIR, Ministry of Science & Technology has a scheme to Enhance the Efficacy of Transfer of Technology (SEETOT) one of whose components is the Promotion and Support to Consultancy Services (PSCS). The main objectives of this Plan being implemented by Department of Scientific & Industrial Research (DSIR) which is also concerned with the task of promoting and strengthening the consultancy services in the country among its other responsibilities are to strengthen and promote consultancy services in various areas including:
Ø Promote and strengthen consultancy capabilities for both domestic and export markets
Ø Support to CDC and other promotional organizations related to consultancy
Ø Human resource development including fellowships to bright and promising engineers as apprentices with eminent consultancy organizations, arrange training etc.
Ø Support R & D efforts of consultancy organizations and commercialization of indigenous technologies
Ø Organize seminars, workshops etc and document consultancy capabilities
Ø Create awareness among users of consultancy
6.1.2 Guidelines for Support under PACS
Detailed guidelines have been drawn up for availing support from DSIR under PACS. DSIR Scheme Guidelines in respect of setting up consultancy clinics and for setting up Design and Engineering Service Centres are given as Annexures 6.1 & 6.2.
6.1.3 Illustrative Programmes/Activities Undertaken under PACS
Some of the programmes/activities carried out under Promotion and Support to Consultancy Services Scheme during 2002-2003 were as follows:
· Documentation of consultancy capabilities and experience covering as many as 38 reports on consultancy capabilities in specific industrial sectors and at state level have been printed so far under the scheme including two specific reports on Study of Consultancy Services in India and Policies and Incentives Available to Consultants in Other Countries.
· Study on role of consultants in R & D and innovation `Leveraging knowledge –Consultancy Capabilities and Needs of CSIR’
· Study on consultancy needs for improving performance/upgradation of textile industry in U.P.
· Study on consultancy capabilities for small hydro power development in
· Promotion of design engineering centres and consultancy clinics – DSIR has evolved programmes for promotion of design and engineering facilities in specific sectors, such as food processing, textiles etc and consultancy clinics to support SMEs particularly those located in clusters.
· Food Processing Technologies and Services Centre (FPTSC) at Kanpur which is set up by U P Industrial Consultants Ltd (UPICO) in technical collaboration with CFTRI to help the food processing industries in the North Western region of the country on payment basis.
· Consultancy clinic for textile industry at Bhilwara to provide door step professional services for textile industry in the main was set up by Rajasthan Consultancy Organization (RAJCON)
· Consultancy clinic for LimeKiln industry at Katni with a view to provide doorstep professional services for limekiln industries in particular was set up by Madhya Pradesh Consultancy Organization Ltd.
· Similar proposals from other organizations for setting up consultancy clinics for different SME clusters as well as for setting up of design & engineering and consultancy services centres for areas such as small hydropower development etc. were under consideration.
· The scheme also provided advisory services to various consultancy related organizations and departments in relation to their programmes and activities including Consultancy Committee of FIEO, Governing Council of CEAI and the Ministry of Commerce Committee on WTO negotiations in respect of Trade in Services.
· A number of seminars/workshops/meetings related to the promotion of consultancy services were undertaken.
6.1.4 DSIR Support to TCDPAP
DSIR also supports the Technical Consultancy Development Programme for
6.1.5 Role of EXIM Bank in the Promotion of Export of Consultancy Services
EXIM Bank set up in 1981 for the purpose of financing; facilitating and promoting foreign trade in
EXIM Bank has been playing a pioneering role in promoting domestic consultancy services in overseas markets. The range of services offered by the Bank are administered through innovative funding solutions that cover the entire consultancy business cycle as follows:
Project Information Services: EXIM Bank identifies specific requirements for information on projects and assignments overseas, which may be initiated by requests from individual consulting organizations. The Bank then activates its network of offices abroad to obtain the requested information. Information and support services to Indian companies to help improve their prospects for securing business in multilateral agencies funded projects. EXIM Bank provides assistance in identifying select opportunities for Indian exporters in upcoming projects funded by various multilateral funding agencies such as World Bank (WB), Asian Development Bank (AsDB), African Development Bank (AfDB), and European Bank for Reconstruction and Development (EBRD). EXIM Bank has tie-ups with International Finance Corporation, Africa Project Development Facility, Africa Enterprise Fund, Technical Assistance & Trust Funds, Mekong Project Development Facility, Eastern & Southern African Trade & Development Bank (PTA Bank) and African Management Services Company (AMSCO),
· Dissemination of business opportunities in funded projects
· Providing detailed information on projects of interest
· Information on Procurement Guidelines, Policies, Practices of Multilateral Agencies
· Assistance for Registration with Multilateral Agencies
· Bid Advisory Services: The Bank provides under MPFO guidance in the preparation of bids as per international standards. These bid advisory services including educating prospective domestic bidders on the nature and extent of technical and professional expertise required.
· Bid Intervention Services: The Bank has attempted under MPFO to appraise the funding authorities of any unfavourable impressions of Indian companies that might be carried over to the bid evaluation process. The Bank attempts this through formal channels.
· Procurement Seminars with Funding Agencies: Procurement seminars organized by the Bank both at national and international fora help to bring forward capabilities of domestic consultancy organizations to the funding agencies.
· Project Preparatory Services Overseas: This programme was set up in 1987 to promote Indian consultancy at preparatory stages in projects overseas with potential of Multilateral Funding and downstream linkages for Indian exports. The programme enables Indian consultancy firms to undertake project preparatory studies in developing countries by grant/loan financing. When consultancy organizations lack overseas experience, or the relevant overseas project experience, the Bank steps in to provide assistance to acquire such experience. Additionally, when firms are not short-listed, the Bank supports relevant research and preparatory work in the required areas.
· Strategic Market Entry Support: The Bank also provides market entry support services to consultancy organizations. The methodology involves assistance in information about the market and prevailing local conditions, including information on local contacts and local firms.
· Export Facilitation Programmes: The Bank enables the setting up of institutes for software training under this programme.
· Overseas Investment Finance: The Bank enables Indian promoters to finance equity contribution in ventures set up abroad.
· Export Product Development Finance: The Bank enables Indian firms to undertake product development and R & D for exports.
· Executive Services Overseas Programme: Under this programme, the Bank enables Indian experts to share their experiences with the beneficiaries overseas through provision of a variety of technical assistance.
EXIM Bank conceived and promoted Global Procurement Consultants Ltd. (GPCL), a consultancy organisation established in late 1996 which is a unique venture amalgamating India's consultancy expertise in project management of key sectors of infrastructure and industry, and its shareholding is also a unique mix of Public and Private Sector Enterprises, bringing about a synergy of talent and experience available in both sectors. Many projects in developing countries funded by multilateral financial institutions like World Bank, Asian Development Bank and African Development Bank suffer from time and cost overruns due to poor procurement planning and adhoc decisions. To overcome this, a sound and independent advice and close monitoring of projects is necessary. Realising the tremendous potential for such consultancy opportunities globally, Export-Import Bank of India took the initiative in setting up GPCL with partnership from industry leaders in sectors such as Energy, Water Resources, Transportation, Mining, Chemical Industries, Agriculture, Health, Education, etc. It has also established its credentials with the World Bank having won through international competition, major consultancy assignments in conducting Procurement Audits of the World Bank funded projects in
The Bank operates a wide range of financing and promotional programmes. The Finance for Technology and Consultancy Services Programme enables Indian exporters of consultancy and technology services to extend term credit to overseas importers. The Finance for Deemed Exports Programme enables Indian companies to meet cash flow deficits of contracts secured in
The Bank is involved in promotion of two-way technology transfer through the outward flow of investment in Indian joint ventures overseas and foreign direct investment flow into
EXIM Bank and CDC cooperate/share with each other in identifying consultants for business opportunities & development of local and international consultancy market. They also participate in seminars /training programmes conducted for promotion of consultancy services.
6.1.6 Role of Federation of Export Organizations (FIEO) in the Promotion of Export of Consultancy Services
FIEO membership, largely comprising professional exporting firms with strong credentials, called Government-recognized Export Houses, Trading Houses, Star Trading Houses and Super Star Trading Houses, and Consultancy exporting firms, contributes a major share of
FIEO represents, directly or indirectly, over 100,000 exporters across
FIEO's activities/programmes include the following:
· Organization of seminars/workshops/trade fairs etc.
· Interaction with Government
· Specialized Divisions for handling a broad spectrum of activities
· Maintaining a diverse database related to information on
· Interaction with Banks/Financial Institutions
FIEO is the nodal agency nominated by the Government of India for promoting exports of consultancy and other services (161 tradable services in all covered under the head of services classified under 12 major categories, excepting software consultancy services which is under the ambit of Electronics & Software Export Promotion Council). The list of these services which includes consultancy services in different sectors/sub-sectors is given as Annexure-6.3. As part of its export promotion programme, FIEO has set up a separate department to promote export of services. Besides carrying on an ongoing programme of seminars and workshops to promote the sector, FIEO is planning to organize an International Congress on Trade in Services to create global awareness of
It was indicated that Reserve Bank of
The Government of India has given special status to the services sector in its Export-Import Policy 2002-2007 announced on 31st March 2002. It included all the 161 tradable services covered under the head “Services” where payment for them is received in free foreign exchange.
A "Service Provider", according to the Exim Policy, means a person providing:
· `service’ from
· `service’ from
· `service’ from
· supply of a ‘service’ in India relating to exports paid in free foreign exchange or in Indian Rupee, which are otherwise considered as having been paid for in free foreign exchange by RBI.
A Service Provider (other than hotels) is entitled to duty-free imports equivalent to 10% of the average foreign exchange earned by him in the preceding three years. The duty-free entitlement is to be used for import of any capital goods including Spares, office equipment(s) and professional equipment(s), office furniture & consumables other than agricultural products, dairy products, Motor Cars, Sports utility vehicles and all purpose vehicles covered under Chapter 22 of the ITC (HS) Classification.
The entitlement and the goods are non-transferable, and are available only to those service providers who have average foreign exchange earnings of over Rs. 30 lakh in preceding 1/2/3 licensing years.
The Export Promotion Capital Goods (EPCG) Scheme allows import of capital goods for pre-production, production and post-production (including CKD/SKD thereof, as well as computer software systems) at 5% Customs duty subject to an export obligation equivalent to 8 times of duty saved on capital goods imported under the EPCG Scheme. The obligation has to be fulfilled over a period of 8 years reckoned from the date of issue of license by the Services unit of the company or any other Service units falling within the definition of group companies. However, in respect of the EPCG licenses with a CIF value of Rs.100 crore or more, the export obligation is required to be fulfilled over a period of 12 years.
Capital goods include spares, jigs, fixtures, dies and moulds. EPCG license may also be issued for import of components of such capital goods required for assembly or manufacture of capital goods by the license holder.
Moreover, spares, refractories, catalyst and consumables for the existing plant and machinery may also be imported under the EPCG scheme.
Second-hand capital goods upto 10 years old may also be imported under the EPCG scheme, subject to an export obligation equivalent to 8 times of duty-saved, to be fulfilled over a period of 8 years reckoned from the date of issue of license. The service providers are also not required to maintain average export as required by merchandise exporter.
Service Providers are eligible for recognition as “Status Holders”, as per the table given below:
|
Category |
Total foreign exchange earning by way of services, or during the preceding three licensing years. (in Rupees) |
|
Export House |
15 Crores |
Trading House
|
300 Crores |
|
Star Trading House |
1500 Crores |
|
Super Star Trading House |
6000 Crores |
These status holders are eligible for the following special facilities:
· License/certificate/permissions and Customs clearances for both imports and exports on self-declaration basis.
· 100% retention of foreign exchange in EEFC account.
Financial assistance is available under this scheme to Export Promotion Councils, industry, and trade associations, and other eligible entities, as may be notified from time to time, on the basis of the competitive merits of proposals received in this regard for the following purposes, which, inter-alia, include:
· Marketing studies on country, product/services;
· Setting up of common office under one roof and workshop facility in the identified centres on the basis of marketing studies carried out in important cities abroad;
· Participation in sales promotion campaigns through international display centres;
· Publicity campaign for launching identified services in selected markets;
· Participation in international trade fairs, seminars, buyer-seller meets;
· Setting up "business centres" in Indian missions abroad for visiting Indian service providers.
Ø Exemption from Service Tax on Services Rendered in Free Foreign Exchange
As notified by CBDT in their circular dated November 20, 2003, exemption from payment of service tax is available to any person rendering service in respect of which payment is received in India in convertible foreign exchange, provided when the payment so received in India in convertible foreign exchange for taxable services rendered is not repatriated from, or sent outside, India.
All service exporters (except software service providers) will need to register themselves with FIEO to avail various facilities given in Exim Policy.
6.2 Envisaged Role for CDC in
The lead roles envisaged for CDC by the clients is as follows:
· CDC can play the role of facilitator to coordinate and interface between clients, consultants, academia and research organizations.
· CDC can play the role of a developer as the consulting industry needs considerable support to expand, grow and be competitive. This is especially true in the liberalized environment and the on set of several expatriate-consulting firms in
· CDC can play a catalytic role in bring about the changes in legal, institutional, structural, financial and regulatory issues related to the consultancy profession, apart from conventional initiatives.
6.3 Gaps in CDC Services
6.3.1 The responses of other stakeholders interviewed as part of the study have indicated their expectations of CDC services at different levels in the following broad areas/aspects. The gaps have been identified on basis of qualitative comments from the respondents. The survey responses have been analysed and classified under broad heads to allow greater focus.
· Strengthening and Projection of Indian Consultancy Capabilities
· Information on Business Opportunities
· Consultancy Assignments
· Client Education
· Upgradation of CDC Website
· Working of Sub-Committees
· Representations
· Export of Consultancy Services
· Database
· Linkages with Promotional Agencies for Consultancy
· ISO 9000 /ISO 14000 Certification
· Exchange Visits of Consultancy Delegations
· Participatory Involvement
· CDC Chapters
· Consultancy Assignments
· Technical Consultancy Development Programme for
· (TCDPAP)
· Mechanisms for Dialogue
· Consultancy Procurement Processes
· Registration with CDC
· Pooling of Consultant Resources
· Applied Research
· Networking
6.4 Analysis of Services / Benefits Expected from CDC
The specific services expected by other stakeholders in the above areas/aspects are indicated below.
6.4.1 Strengthening and Projection of Indian Consultancy Capabilities
Ø CDC needs to strengthen its operations to identify new disciplines and areas of consultancy which would meet the future needs of the country and in facilitating their development.
Ø CDC should represent the constituency of individual consultants in various fora.
Ø CDC should support continuing education and skill upgradation to consultants in new areas. CDC can conduct training programmes in certain specialized areas alongwith its members. CDC members who have large reservoir of technical and professional manpower can contribute effectively in this direction.
Ø CDC should lay more emphasis as a facilitator on business development for individual consultants, who may have expertise in a particular field, but lack in financial and organizational capability to undertake projects.
Ø CDC should nurture building up of consultancy expertise in emerging areas of consultancy such as renewable energy, composite technologies, environment and biotechnology etc to exploit the potential opportunities for Indian consultancy profession.
Ø CDC should have a facilitator role in establishing and promoting linkages between R & D laboratories/institutions and consultants for application and commercialization of indigenously developed technologies. While the laboratory role will be in development of technologies, upscaling from lab to pilot scale, basic engineering, know-how transfer, etc; the role of consultants will be significant in detailed engineering, trouble shooting, process optimization, supervision, yield improvement, and other advisory functions on an on-going basis for the client.
Ø CDC has a role in bringing accountability to consultancy profession through third party validation in similar areas, particularly as the level of expertise of consultants is considered to be low in some cases. For example, IIT has taken up the role of 'Proof Consultant' to validate civil structural design of consultants.
6.4.2 Information on Business Opportunities
Ø CDC has linkages in establishing leverage with Government of India in pursuing consultancy opportunities in countries under reconstruction/transition (such as Sri Lanka) and the same should be continued to be given due priority.
Ø CDC should eventually strive to get referrals from clients in respect of appropriate consultants within the country to meet their specific consultancy needs on an automatic basis as this will lead to facilitating business opportunities for the consultancy profession in
6.4.3 Consultancy Assignments
Ø CDC itself may not undertake consultancy assignments as a policy, but encourage/facilitate consultancy assignments for members from Government and Public Sector with CDC as the front organization.
6.4.4 Client Education
Ø CDC needs to strengthen and expand its activities in the way of creating awareness amongst Government agencies connected with the development work to use consultancy services on a regular basis.
6.4.5 Upgradation of CDC Website
Ø CDC should study other similar trade and industry associations/bodies to introduce innovative services as part of assimilation of successful strategies. These include Institution of Engineers (India), Indian Concrete Institute, APCTT, some of which offers web enabled services in order to enhance the level of services to its members, including online payment, access to Journal, change of address, access to the members’ profile, status of subscripttion dues, etc. These would be available to only selected categories of members against individual confidential password. Some organizations provide exhibition services and provision to submit technical proposals/offers and provide access to technical papers (APCTT); provide sector specific information of events and regional study tours and classifieds (International Solid Waste Association), certification information (NASSCOM), downloads of industry research publications (American Society of Civil Engineers), information on library facilities (All India Management Association), information of Chapter/Branch Activities and members quarter (The Institution of Structural Engineers, UK), media gallery (Consulting Engineers Association of India), on-line applications (Ahmedabad Management Association), job forum (Structural Engineers Association International), Acts, rules and regulations (Council of Architecture ), industry monitor and trade zone (Confederation of Indian Industry), international news (FICCI) etc.
6.4.6 Working of Sub-Committees
Ø CDC should expand the sub-committees on issues of significance for the consultancy profession and which are of sectoral importance for the benefit of members. For example, a core group on Export of Consultancy was constituted within CDC. This will assist CDC in determining the select countries for obtaining and storing information of interest to consultants.
6.4.7 Representations
Ø CDC has made a policy level representation to the Ministry of Programme Implementation to advise all Government Departments to do away with the need for EMD in the award of consultancy contracts. This should be pursued by CDC for the benefit of consultancy community.
Ø CDC should facilitate/pursue with CEAI for the enactment of Engineers Bill as well as in its implementation as a facilitator and through awareness generation amongst consulting practitioners. The Continuing Education Cells of academic institutions (such as IIT, Chennai) would be able to provide the necessary training to meet the requisite number of hours /year in specific areas/sectors for consultancy practitioners.
6.4.8 Export of Consultancy Services
Ø CDC should organize consortia of Indian consultants for bidding against large consulting assignments
Ø CDC can play a role in the promotion of joint cooperation between R & D organizations and consultants for export of projects and services
Ø CDC can initiate efforts in formation of a Project Export Promotion Council with assistance of GoI and can develop linkages with similar type of foreign associations for providing effective & relevant services. This would be useful in the context of Government of India (GoI) having set up a Task Force in Prime Minister’s office for review of Consultancy Projects. One of the recommendations of the Task Force was to establish Project Export Promotion Council for consultancy development in
6.4.9 Database
Ø Significant scope exists for CDC to expand database of existing consultancy organizations/individual experts in different disciplines as also in updating of database. CDC has around 1100 consultants and consultancy firms in its database and has around 20,000 contacts in its mailing list which comprises of members of other organizations such as AIMA, CII as well as large corporates, academic and R & D organizations, trade associations, CEAI, IMCI etc. There is thus a longway to go for the Centre in building its database of Indian consultancy profession as presently the existing database does not adequately cater to the needs of users and other stakeholders.
Ø CDC should update its database and information of various international financial institutions.
6.4.10 Linkages with Promotional Agencies for Consultancy
Ø CDC should function as apex body for all type of consultancies. Appropriate linkages needs to be developed with other organizations such as Institute of Architects, Institute of Chartered Accountants,
6.4.11 ISO 9000 /ISO 14000 Certification
Ø CDC should strengthen its Quality and Environmental Management group to provide training, consultancy and facilitation to consultancy and service sectors for ISO 9000/ISO 14000 certification.
Ø CDC could have linkages with entities such as Quality Management Institute in the private sector and the National Institute of Standardization & Quality Control of BIS as part of promoting ISO 9000 quality management system in consultancy profession to provide for a competency index, consistency in quality and establish improved business practices.
6.4.12 Exchange Visits of Consultancy Delegations
Ø CDC should lead delegation of consultants and consultancy organizations into regions of developed and developing countries to showcase
Ø CDC should closely coordinate with Ministry of External Affairs to organize interaction between visiting professionals/consultants from abroad with CDC members
6.4.13 Participatory Involvement
Ø CDC should provide the motivation to enhance the proactiveness of consultants in terms of interaction with CDC on issues of common interest to the consultancy profession which is currently inadequate.
6.4.14 CDC Chapters
Ø CDC does not have an All-India reach and should work towards this to promote growth of consultancy profession in the country. This should include enrolment of new members and opening of new chapters to help facilitate replication of key activities/programmes of CDC on a national level.
Ø In the initial stage, CDC can depute part time assistant /support staff for the new local chapters till such time they generate sufficient activities for employing full time staff.
6.4.15 Consultancy Assignments
Ø A referral mechanism of consultancy assignments by Government agencies to CDC will help increase the beneficiaries. It appears that 19 consultancy proposals were sent to Ministries by CDC and 4 assignments secured and given to member consultants in 2002-2003. These constitute very few beneficiaries.
Ø CDC should take up projects in consultancy and studies of national interest jointly/under support of funding agencies.
Ø CDC should endeavour to form consortium of consultants comprising of CDC members, in which, CDC should also participate to take up consultancy jobs and studies/reports from various clients/government departments. In this arrangement, CDC can market the project, whereas, the actual execution can be done by the member consultants. The revenue sharing between participants can be worked out in proportion of their job responsibility.
6.4.16 Technical Consultancy Development Programme for
(TCDPAP)
Ø UN-ESCAP supported Technical Consultancy Development Programme for Asia and the Pacific (TCDPAP), of which CDC is the Secretariat, should operate on a higher trajectory, leading to an ultimate setting-up of its permanent Secretariat in
Ø CDC should initiate an evaluation of the benefits of TCDPAP to review the collaborative arrangements and training opportunities for Indian consultants which have fructified as a result of this programme as a number of Delegation of Indian consultants have visited other members countries such as China, Bangladesh, Nepal, Malaysia etc as part of the yearly event where the participating consultants in the delegation from India bear full costs of their visit.
6.4.17 Mechanisms for Dialogue
Ø CDC should institute mechanisms for continual dialogue and interaction with the consultants to understand the issues concerning their business and taking up the arising issues to find solutions.
Ø No systematic mechanism and linkages between the government agencies and CDC exist for referral by clients on consultancy assignments and there is a significant scope for improvement in this area. No Individual/organizational targets should be set in this area within CDC.
Ø Regarding interaction at national and regional level on policy options in the areas of promoting growth of consultancy profession, barring a few representations (such as related to tax exemption of export of services), there is no systematic and periodic brainstorming with member consultants to take up policy issues of interest with the Government.
Ø CDC may consider entering into MoUs with national laboratories to formalize the arrangements, roles and responsibilities for promotion of consultancy services from the laboratories to industry and other organizations. NRDC has been involved in the promotion of commercialization of R & D and technologies developed by R & D organizations (not promotion of consultancy services) based on a standard format for MoU prescribed as a model agreement by the Ministry of Science & Technology. The role of NRDC is to identify potential clients and facilitate arrangements for completion of legal agreements etc between the client and the R & D organization for which a commission is leviable by NRDC. A similar model is considered to be appropriate for adoption by CDC in forging linkages with national R & D organizations.
Ø CDC should compile and disseminate information on funds budgeted under consultancy component by various Ministries/Departments of Government of India at central and state levels for projects, sector schemes and programmes of interest for consultants as a single source of critical information for the benefit of consultancy profession. Ongoing updating of this information will also be required.
Ø CDC should encourage/foster the outsourcing of consultancy services in specific areas not available in-house with R & D organizations as part of opening of avenues for business opportunities for consultancy profession.
6.4.19 Registration with CDC
Ø CDC should extend its role equivalent to that of Industry associations like CII and FICCI etc but relevant to issues concerning consultants. CDC should improve their image in the country so that certain prestige should be attached to being their member.
6.4.20 Applied Research
Ø CDC needs to initiate and undertake joint studies with international institutions in developing countries or elsewhere to improve the quality and quantity of intellectual interchange relevant to consultancy profession.
6.4.21 Networking
Ø CDC should closely network with other associations such as FICCI, CII and ASSOCHAM
Ø CDC could have closer linkages with export promotion councils and industry associations such as CAPEXIL, PHARMAXIL, CHEMEXIL, Bulk Drug Manufacturers Association, Pesticide Formulation Association of India, Indian Chemical Manufacturers Association of India etc and R & D laboratories to address the technical problems faced by the industry with the involvement of consultants as interface.
Aman Thakur
(Sr. Asstt. in Warehouse)
(39 Points)
Replied 07 April 2011
can we transfer the capital goods imported under EPCG to group company?
RAMESH KUMAR VERMA
( CS PURSUING )
(43848 Points)
Replied 07 April 2011
PLEASE NOTED :-
Notification No. 102/2009-Customs dated the 11.9.2009
Exemption notification for Export Promotion Capital Goods (EPCG) under zero customs duty
G.S.R. 668 (E). - In exercise of the powers conferred by sub-section (1) of section 25 of the Customs Act, 1962 (52 of 1962), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts goods specified in the Table annexed hereto, from,-
(i) the whole of the duty of customs leviable thereon under the First Schedule to the Customs Tariff Act, 1975 (51 of 1975), and
(ii) the whole of the additional duty leviable thereon under section 3 of the said Customs Tariff Act, when specifically claimed by the importer.
2. The exemption under this notification shall be subject to the following conditions, namely :-
(1) that the goods are imported for export of engineering and electronic products, basic chemicals and pharmaceuticals, apparels and textiles, plastics, handicrafts, chemicals and allied products and leather and leather products and are other than those required for export of products covered under following chapters or headings of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975), namely:-
Chapters 1 to 4,5(other than handicrafts), 6 to 24,25 to 27, 31,40,43,44(other than handicrafts),45,47 to 49,68(other than handicrafts),69 , 70,71,81 (metals in primary and intermediate forms only),89,93,97(other than handicrafts),98; headings 7201 to 7212, 7218 to 7220,7224 to 7226,7401 to 7406, 7501 to 7504, 7601 to 7603, 7801 to 7802, 7901 to 7903, 8001 to 8002 and 8401.
(2) that the goods imported are covered by a valid authorization issued under the Export Promotion Capital Goods (EPCG) Scheme in terms of Chapter 5 of the Foreign Trade Policy permitting import of goods at zero customs duty and the said authorization is produced for debit by the proper officer of customs at the time of clearance:
Provided that for import of spare parts specified at Sr.No.4 of the said Table, the validity period of the authorization shall be deemed to be the period permitted for fulfilment of the export obligation in full :
(3) that the importer is not currently availing any benefits under Technology Upgradation Fund Scheme (TUFS) administered by Ministry of Textiles, Government of India.
(4) that the importer does not avail, in the year of import of the goods, the benefit of Status Holder Incentive Scheme under Para 3.16 of the Foreign Trade Policy.
(5) that the goods imported shall not be disposed of or transferred by sale or lease or any other manner till export obligation is complete.
(6) that the importer executes a bond in such form and for such sum and with such surety or security as may be specified by the Deputy Commissioner of Customs or Assistant Commissioner of Customs binding himself to comply with all the conditions of this notification as well as to fulfill export obligation on Free On Board (FOB) basis equivalent to six times the duty saved on the goods imported as may be specified on the authorization, or for such higher sum as may be fixed or endorsed by the Licensing Authority or Regional Authority in terms of Para 5.10 of the Handbook of Procedures Vol I, issued under para 2.4 of the Foreign Trade Policy, within a period of six years from the date of issue of Authorization, in the following proportions, namely :-
| S.No. | Period from the date of issue of Authorization | Proportion of total export obligation |
|---|---|---|
| (1) | (2) | (3) |
| 1. | Block of 1st to 4th year | 50% |
| 2. | Block of 5th to 6th year | 50% |
Provided further that where a sick unit is notified by the Board for Industrial and Financial Reconstruction (BIFR) or where a rehabilitation scheme is announced by the concerned State Government in respect of sick unit for its revival, the export obligation may be fulfilled within time period allowed by the Licensing Authority or Regional Authority as per the rehabilitation package prepared by the operating agency and approved by BIFR or rehabilitation department of State Government . In cases where the time period is not specified in the rehabilitation package, the export obligation may be fulfilled within the time period allowed by the Licensing Authority or Regional Authority which shall not exceed twelve years.
Provided also that spares (including refurbished/reconditioned spares), moulds, dies, jigs, fixtures, tools, refractory for initial lining and catalyst for initial charge, for the existing plant and machinery (imported earlier, under EPCG or otherwise), shall be allowed to be imported under the EPCG scheme subject to an export obligation equivalent to 50% of the normal export obligation prescribed above, to be fulfilled in 6 years reckoned from the date of issue of the Authorization, subject to the condition that the CIF value of import of the above spares etc. will be limited to 10% of the CIF value of the plant and machinery imported under the EPCG authorization or 10% of the book value of the plant and machinery imported earlier otherwise than under EPCG Scheme, as the case may be.
Provided also that export obligation of a particular block may be set off against the excess exports made in the said preceding block(s);
(7) that if the importer does not claim exemption from the additional duty leviable under section 3 of the Customs Tariff Act, 1975, the additional duty so paid by him shall not be taken for computation of the net duty saved for the purpose of fixation of export obligation provided the Cenvat credit of additional duty paid has not been taken;
(8) that the importer produces within 30 days from the expiry of each block from the date of issue of authorization or within such extended period as the Deputy Commissioner of Customs or Assistant Commissioner of Customs may allow, evidence to the satisfaction of the Deputy Commissioner of Customs or Assistant Commissioner of Customs showing the extent of export obligation fulfilled, and where the export obligation of any particular block is not fulfilled in terms of the preceding condition, the importer shall within three months from the expiry of the said block pay duties of customs equal to an amount which bears the same proportion to the duties leviable on the goods, but for the exemption contained herein, which the unfulfilled portion of the export obligation bears to the total export obligation, together with interest at the rate of 15% per annum from the date of clearance of the goods;
(9) where the importer fulfills 75% or more of the export obligation as specified in condition (6) (over and above 100% of the average export obligation) within half of the period specified for export obligation as mentioned in condition (6), his balance export obligation shall be condoned and he shall be treated to have fulfilled the entire export obligation;
(10) that the capital goods imported, assembled or manufactured are installed in the importer’s factory or premises and a certificate from the jurisdictional Deputy Commissioner of Central Excise or Assistant Commissioner of Central Excise, as the case may be, is produced confirming installation and use of capital goods in the importer’s factory or premises, within six months from the date of completion of imports or within such extended period as the Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be, may allow :
Provided that in case of import of spares, the installation certificate shall be produced within three years from the date of import :
Provided further that if the importer is not registered with central excise, he may produce the said certificate of installation and usage issued by an independent Chartered Engineer :
Provided further that in the case of manufacturer exporter and merchant exporter having supporting manufacturer(s) or vendor(s), the capital goods may be installed at the factory or premises of such other person whose name and address are endorsed on the authorization referred to in condition (2) and also on the shipping bills and where the bond for full difference of duty, if necessary, in terms of condition (6) with or without a bank guarantee, as the case may be, is executed by the importer and such other person binding themselves jointly and severally to fulfill the export obligation and all other conditions of this notification and to pay duty with interest at the rate of 15% per annum in case of default :
(11) that the imports and exports are undertaken through sea ports at Bedi (including Rozi-Jamnagar), Chennai, Cochin, Dahej, Dharamtar,Haldia (Haldia Dock complex of Kolkata port) Kakinada, Kandla, Kolkata, Krishnapatnam, Magdalla, Mangalore, Marmagoa, Muldwarka, Mumbai, Mundhra,Nagapattinam, Nhava Sheva, Okha, Paradeep, Pipavav, Porbander, Sikka, Tuticorin, Visakhapatnam and Vadinar or through any of the airports at Ahmedabad, Bangalore, Bhubaneswar, Chennai, Cochin, Coimbatore, Dabolim (Goa), Delhi, Hyderabad, Indore, Jaipur, Kolkata, Lucknow (Amausi), Mumbai, Nagpur, Rajasansi (Amritsar), Srinagar, Trivandrum and Varanasi or through any of the Inland Container Depots at Agra, Ahmedabad, Anaparthy (Andhra Pradesh), Babarpur, Bangalore, Bhadohi, Bhatinda, Bhilwara, Bhiwadi, Bhusawal, Chheharata (Amritsar), Coimbatore, Dadri, Dappar (Dera Bassi), Daulatabad (Wanjarwadi and Maliwada), Delhi, Dighi (Pune), Durgapur (Export Promotion Industrial Park), Faridabad, Garhi Harsaru, Gauhati, Guntur, Hyderabad, Jaipur, Jallandhar, Jamshedpur, Jodhpur, Kanpur, Karur, Kota, Kundli, Loni (District Ghaziabad), Ludhiana, Madurai, Malanpur, Mandideep (District Raisen), Miraj, Moradabad, Nagpur, Nasik, Pimpri (Pune), Pitampur (Indore), Pondicherry, Raipur, Rewari, Rudrapur(Nainital), Salem, Singanalur, Surat, Surajpur, Tirupur, Tuticorin, Udaipur, Vadodara, Varanasi, , Waluj (Aurangabad) or through the Land Customs Station at Agartala, Amritsar Rail Cargo, Attari Road, Changrabandha, Dawki, Ghojadanga, Hilli, Jogbani, Mahadipur, Nepalganj Road, Nautanva (Sonauli), Petrapole, Ranaghat, Raxaul, Singhabad and Sutarkhandi or a Special Economic Zone notified under section 4 of the Special Economic Zones Act, 2005 (28 of 2005):
Provided that the Commissioner of Customs may, by special order or a public notice and subject to such conditions as may be specified by him, permit import and export through any other sea-port, airport, inland container depot or through a land customs station within his jurisdiction.
(12) notwithstanding anything contained in condition (8) above, where the Licensing Authority or Regional Authority grants extension of block-wise period for any block(s) or overall period of fulfilment of export obligation upto a period of two years or regularization of shortfall in export obligation, not exceeding five percent of such export obligation, the said block-wise period or overall period of export obligation shall be extended or condoned by the Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be :
Provided that in respect of sick units referred to in the first proviso to condition (6), extension of overall period of export obligation shall not be allowed :
3. Where the goods specified in the said Table are found defective or unfit for use, the said goods may be reexported back to the foreign supplier within three years from the date of payment of duty on the importation thereof:
Provided that at the time of re-export, the goods are identified to the satisfaction of the Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be, to be the same as the goods which were imported.
4. This notification, for import of goods specified at Serial Nos.1 and 2 of the said table shall have effect upto 31st December,2011.
Explanation – For the purpose of this notification,-
1. “Capital goods” has the same meaning as assigned to it in Paragraph 9.12 of the Foreign Trade Policy;
2. “Export obligation”, -
(1) means obligation on the importer to export to a place outside India, goods manufactured or capable of being manufactured or services rendered by the use of capital goods imported in terms of this notification. The export obligation shall be over and above the average level of exports achieved by the importer in the preceding three licensing years for the same and similar products within the overall export obligation period including the extended period, if any. Such average shall be the arithmetic mean of export performance in the last 3 years for the same and similar products.
Provided that upto 50% of the export obligation may also be fulfilled by export of other good(s) manufactured or service(s) provided by the importer or his group company or managed hotel, which has the EPCG authorization subject to the condition that in such cases, additional export obligation imposed shall be over and above the average exports achieved by the importer or his group company or managed hotel in preceding three years for both the original and the substitute product(s) / service(s) :
Provided further that in case of export of goods relating to handicraft, handlooms, cottage, tiny sector, agriculture, animal husbandry, floriculture, horticulture, pisciculture, viticulture, poultry and sericulture, the importer shall not be required to maintain the average level of exports :
Provided further that in case of export of goods relating to aquaculture(including fisheries), the importer shall not be required to maintain the average level of exports subject to the condition that EPCG authorization has been obtained for goods other than fishing trawlers, boats, ships and other similar items.
Provided also that the goods, excepting tools, imported under this notification by the aforesaid sectors, shall not be allowed to be transferred for a period of five years from the date of imports even in cases where export obligation has been fulfilled. Transfer of capital goods would, however, be permitted within the group companies, after fulfillment of export obligation but before five years from the date of imports, under intimation to Regional Authority and jurisdictional Central Excise Authority :
Provided also that exports made to former USSR, or to such countries as notified by Director General of Foreign Trade as on 31.3.08, shall not be counted for fixing the average level of exports :
Provided also that exports against only such shipping bills which mention the EPCG authorization No. and date shall be counted for the discharge of the export obligation;
(2) shall be fulfilled through physical exports and the export proceeds shall be realized in freely convertible currency. However the following categories of supplies, shall also be counted towards fulfillment of export obligation:
(a) deemed exports, namely:
(i) supply of goods against Advance Authorization/Advance Authorization for Annual Requirement/ Duty Free Import Authorization (DFIA);
(ii) supply of goods to Export Oriented Units (EOUs) or Software Technology Parks (STPs) or Electronics Hardware Technology Parks (EHTPs) or Bio-Technology Parks (BTPs);
(iii) supply of goods to projects financed by multilateral or bilateral agencies or Funds as notified by Department of Economic Affairs (DEA), Ministry of Finance (MOF) under International Competitive Bidding (ICB) in accordance with procedures of those agencies or Funds, where legal agreements provide for tender evaluation without including customs duty; supply and installation of goods and equipments (single responsibility of turnkey contracts) to projects financed by multilateral or bilateral agencies or Funds as notified by DEA, MOF under ICB, in accordance with procedures of those agencies/Funds, where bids may have been invited and evaluated on the basis of Delivery Duty Paid (DDP) prices for goods manufactured abroad;
(iv) supply of goods to any project or purpose in respect of which the Ministry of Finance, by a notification, permits import of such goods at zero customs duty and the supply is made under ICB procedure;
(v) supply of goods to power projects and refineries not covered in (iv) above under ICB procedure;
(vi) Supply of goods to nuclear power projects through competitive bidding as opposed to ICB;
(b) Supply of ITA-1 items to Domestic Tariff Area, provided realization is in free foreign exchange;
(c) Royalty payments received in freely convertible currency and foreign exchange received for Research & Development (R&D) services; and
(d) Payments received in rupee terms for port handling services in terms of chapter 9 of the Foreign Trade Policy.
3. “Foreign Trade Policy” means the Foreign Trade Policy 2009-2014 published in the gazette of India, Part II, Section 3, Sub-section (ii) vide notification of the Government of India in the Ministry of Commerce and Industry, No.1/2009-2014 dated the 27th August, 2009 as amended from time to time;
4. “Licensing Authority or Regional Authority” means the Director General of Foreign Trade appointed under section 6 of the Foreign Trade (Development and Regulation) Act, 1992 (22 of 1992) or an officer authorized by him to grant an authorization under the said Act;
5. “Manufacture” has the same meaning as defined in clause (f) of section 2 of the Central Excise Act, 1944 (1 of 1944).
Table
| S.No.. | Descripttion of goods |
|---|---|
| (1) . | (2) |
| 1. | Capital goods for pre-production, production and post production including second hand capital goods. |
| 2. | Capital goods in Semi Knocked Down (SKD) / Completely Knocked Down (CKD) conditions to be assembled into capital goods by the importer. |
| 3. | Spare parts of CIF value upto 10% of the CIF value of goods specified at Serial Nos.1 and 2 as actually imported and required for maintenance of capital goods so imported, assembled, or manufactured. |
| 4. | Spare parts of CIF value upto 10% of the book value of the existing plant and machinery of the authorization holder. |
[F. No.605/58/2009-DBK ]
Rajesh Kumar Agarwal,
Under Secretary to the Government of India.
RAMESH KUMAR VERMA
( CS PURSUING )
(43848 Points)
Replied 07 April 2011
Provided also that the goods, excepting tools, imported under this notification by the aforesaid sectors, shall not be allowed to be transferred for a period of five years from the date of imports even in cases where export obligation has been fulfilled. Transfer of capital goods would, however, be permitted within the group companies, after fulfillment of export obligation but before five years from the date of imports, under intimation to Regional Authority and jurisdictional Central Excise Authority :
Aman Thakur
(Sr. Asstt. in Warehouse)
(39 Points)
Replied 07 April 2011
we procure the imported capital goods in june 2010 and we have fulfilled the export obligation against EPCG Licence. I think we are eligible to transfer the capital goods.
Dear sir, tell me what is the procedure to transfer the said capital goods?
what paper requirements.?
Thanks for the above reply...
Ramesh
(CA)
(27 Points)
Replied 16 July 2011
Hi
I have a query in relation to 50% reimbursement of registration claims of Pharma exports under MAI Scheme :
01. Can we claim the reimbursement as a manufacturer and the receipt in the name of our subsidiary which is situated either in India or elsewhere outside India.
02. What other documents needs to furnish to get the reimbursement and if you have the template please forward it to me.
Thanks & Regards
Ramesh
RAMESH KUMAR VERMA
( CS PURSUING )
(43848 Points)
Replied 16 July 2011
| Originally posted by : Aman Thakur | ||
 |
we procure the imported capital goods in june 2010 and we have fulfilled the export obligation against EPCG Licence. I think we are eligible to transfer the capital goods. Dear sir, tell me what is the procedure to transfer the said capital goods? what paper requirements.? Thanks for the above reply... |
 |
refer to para 5.7.6 of foreign trade policy:-
The goods excepting tools imported under EPCG scheme by such sectors shall not be allowed to be transferred for a period of five years from the date of imports even in cases where export obligation has been fulfilled.
However, the transfer of capital goods would be permitted to the group companies or managed hotels under intimation to the Regional Licencing Authority.
Moreover, in cases where the service provider wants to discharge export obligation by export of goods also , he shall have to maintain the average level of foreign exchange earning for the preceding three licencing years in respect of goods proposed to be exported for discharge of export obligation.
Regards,
RAMESH KUMAR VERMA
( CS PURSUING )
(43848 Points)
Replied 16 July 2011
| Originally posted by : Ramesh | ||
|
|
Hi I have a query in relation to 50% reimbursement of registration claims of Pharma exports under MAI Scheme : 01. Can we claim the reimbursement as a manufacturer and the receipt in the name of our subsidiary which is situated either in India or elsewhere outside India. 02. What other documents needs to furnish to get the reimbursement and if you have the template please forward it to me. Thanks & Regards Ramesh |
|
for eligibility link is:-
https://www.telecomepc.in/pdf/mai_guide.pdf
Preeti Agarwal
(Articled)
(218 Points)
Replied 27 October 2011
Please define export obligation. Export obligation is = 8times of duty saved.
So please tell me whether we have to export VALUE OF GOODS to be 8 times of duty saved ......or ..,
Goods exported should be of so much value so that VALUE OF DUTY on such exported goods should be 8 times of duty saved.
Kindly clarify.
Regards,
Preeti Agarwal
RAMESH KUMAR VERMA
( CS PURSUING )
(43848 Points)
Replied 31 October 2011
for more info:
https://www.smeindia.net/export_schemes/DOCS/B-1/EXPORT%20PROMOTION%20CAPITAL%20GOODS%20SCHEME.pdf
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