Financial Daily from THE HINDU group of publications
Thursday, Jan 24, 2002
Financial Daily from THE HINDU group of publications Thursday, Jan 24, 2002 |
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Industry & Economy
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Paints Paints sector seeks time to meet export obligation Mohan Padmanabhan
KOLKATA, Jan. 23 THE paints, varnishes and allied products export sector has urged the Government to extend an opportunity for fulfilment of export obligation under advance licence/ EPCG (Export Promotion Capital Goods) scheme to exporters without submission of a bank guarantee, with a condition that the export obligation should be fulfilled within 120 days from the date of public notice. It is suggested that if exporters fail to fulfil the export obligation within the stipulated period, they should be directed to pay customs duty with interest thereon forthwith. Industry sources aver that in this way, while the Government will be able to earn more foreign exchange within a short period, exporters too will be able to fulfil their export obligation and will be relieved from payment of customs duty and interest. It is pointed out that this may also help regularise the hundreds of cases of non-fulfilment of export obligation now pending with the offices of the Director-General of Foreign Trade (DGFT). The scheme, exporters say, should be made applicable covering all the licences in respect of the periods from 1992 onwards, including the EPCG licences. The Government has already allowed an extension in the export obligation period by six months for advance licence holders against execution of a bank guarantee. The relaxation is applicable in respect of advance licences for physical exports issued on or after April 1997. In all such cases, where the licence holder has failed to complete his export obligation within the stipulated period of 30 months, he can apply for extension of export obligation for another six months on submission of a bank guarantee. As per the DGFT notification already issued, the bank guarantee should cover the customs duty together with 24 per cent simple interest on the unutilised exempt material from the date of import up to the period sought. Pointing out that one of the biggest hurdles in opting for the scheme was furnishing of a bank guarantee, most exporters feel it was now extremely difficult to obtain one quickly, as bankers these days were reluctant to furnish them unless the exporters deposit an equivalent amount with the bank. "The time period of 60 days for submission of the application (seeking extension), is therefore not enough." According to Mr M.F. Vohra, Chairman of Capexil, synthetic enamel paints, primers etc are considered by port authorities as semi-hazardous cargo, and accordingly, restrictions are imposed with regard to loading and stuffing of containers for export consignments. He said these curbs should be lifted. Additionally, he suggested that some remedial measures may be adopted to provide the zinc oxide sector marketing viability to sustain itself in the export markets in the wake of massive cheap imports of this product from China and Nepal.
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