Page 17 - Craftcil July 2017
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I   impex

            This column is compiled by Consultant [EXIM Policy] of EPCH. It contains recent Public Notices, Notifications and Circulars
                         of DGFT, CBEC and Department of Revenue. If a handicraft exporter has question[s] to ask on
                             Foreign Trade Policy, he/she may please write / e-mail to EPCH at

             Impex # 1  Important FTP provisions made less beneficial on account of implementation of GST

           Before the introduction of GST Scheme on 01-07-2017, DGFT, Ministry of Commerce & Export Promotion Councils
           including Export Promotion Council for Handicrafts (EPCH) made strong representations to Ministry of Finance & GST
           DGFT issues Trade Notice      Council not to change the basic character of decades old total duty exemption
                                         schemes (ab initio) of FTP. EPCH even took a delegation of handicrafts exporters to
           amending (diluting) the
                                         Finance Minister to seek relief in respect of GST provisions that may cause harms &
           benefits under Duty
                                         hardships to the exporters. The GST Council, however, did not relent on the ground
           Exemption Schemes, etc.       that it is a fundamental of GST Scheme that one has to pay the tax first & take the
           in the context of the         Input Tax Credit (ITC) afterwards. 'The Chain' they said can not be broken.
           implementation of the         In view of the above view of GST Council, DGFT has issued a Trade Notice No. 11/2018
           GST regime.                   dt. 30-06-2017 amending the provisions in FTP to be as per GST regime.

           A copy of DGFT Trade Notice No. 11/2018 referred above is reproduced below:

                                        Copy of DGFT Trade Notice No. 11/2018  dt. 30-06-2017
            Subject: Important FTP provisions in the context of the implementation of the UST regime applicable w.e.f.

            The chapter wise provisions of the FTP 2015-20:
            General Provision
            • With effect from July 1, 2017, the term "Central Excise Authority" used in Foreign Trade Policy 2015-20 and Foreign
              Trade procedures 2015-20 should be read as "Jurisdictional Customs Authority".

            Chapter 2
            Changes in IEC notified through Trade Notice No.09/201'8 dated 12.06.2017.

            Chapter 3
            • The Duty Credit Scrips (issued under Chapter 3 of the FTP) cannot be used for payment of IGST and GST
              compensation cess in imports, and CGST, SGST, IGST and GST compensation cess for domestic procurement.

            Chapter 4
            • Under the GST regime, no exemption from payment of Integrated GST and Compensation Cess would be
              available for imports under Advance Authorisation.

            • Importers would need to pay IGST and take input tax credit as applicable under GST rules.
            • However, imports under Advance Authorisation would continue to be exempted from payment of Basic Customs
              Duty, Additional Customs Duty specified under Section 3(1), 3(3) and 3(5) of the Customs Tariff Act, Education Cess,
              Anti-dumping Duty, Safeguard Duty and Transition Product Specific Safeguard Duty, wherever applicable.
            • Applicable GST would need to be paid while making local procurement, using an invalidation letter of Advance
              Authorisation/DFIA. Recipient of goods can take Input Tax Credit (ITC) of the GST paid on such local procurement.
              This Input Tax Credit can be utilised as per GST rules.
            • Advance Release Order facility shall not be available for procurement of inputs under Advance Authorisation
              scheme except for inputs listed in Schedule 4 of Central Excise Act, 1944 read with The Taxation Laws

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