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Our Bureau

New Delhi, Aug. 31 The various export promotion and trade facilitation measures announced in the recent foreign trade policy (FTP) 2009-14 will cost the exchequer an additional Rs 2,200 crore this fiscal, the Chairman of the Central Board of Excise and Customs (CBEC), Mr V. Sridhar, said here today.

The latest Budget document showed that the export subsidies given through various export promotion concessions were Rs 44,417 crore in 2008-09. This does not include the drawback payments made by the revenue department for that year.

In 2007-08, the total drawback payment was Rs 9,015 crore. Besides the drawback payment, the export promotion concessions cost the Government Rs 56,265 crore in 2007-08.

Going by the declining trend in merchandise exports and the deep cuts in excise duties as part of the stimulus packages, the outgo on export subsidies are expected to be lower in 2009-10 than the 2008-09 level. This is likely even after the latest giveaway of additional Rs 2,200 crore.

To this, drawback payments, which could be about Rs 8,000-Rs 9,000 crore, will have to be added up to get a right assessment of the total export subsidies for the current fiscal. “We had quantified it at Rs 2,200 crore,” Mr Sridhar told reporters on the sidelines of a CII meeting, when asked about the revenue implications of the FTP for 2009-10.

In FTP 2009-14, announced last week, the Government had raised the incentive available under Focus Market Scheme (FMS) from 2.5 per cent to 3 per cent. Also, the incentive available under Focus Product Scheme (FPS) was raised from 1.25 per cent to 2 per cent.

As many as 26 new markets have been added under FMS. These include 16 new markets in Latin America and 10 in Asia-Oceania. To aid technological upgradation of the export sector, the export promotion capital goods (EPCG) scheme at zero duty has been introduced.

To accelerate exports, additional duty credit scrips are proposed to be given to status holders at 1 per cent of the free on board (f.o.b.) value of past exports.

Earlier, addressing a workshop on the impact of transaction costs in the ICTE manufacturing sector, Mr Sridhar said that the Government was conscious that companies are now operating on “wafer-thin margins” and that it was important to address their concerns on transaction costs. However, he made it clear that CBEC cannot do away with all the controls even as it may be ready to look at cutting down processes.

“In the name of simplification, we may sometimes overdo it. This will result in backlash in terms of corporate frauds,” he said, striking a note of caution.

On the issue of bank guarantees, Mr Sridhar highlighted that the CBEC did not have a happy experience and sought trade’s co-operation on this front. The issue was that these bank guarantees were not being validated by trade with the bank after their expiry.

Mr Sridhar also said that the CBEC was in the process of expanding the sphere of automation.

The revenue department plans to extend the electronic data interchange (EDI) facility to more land customs stations. On the excise and service tax front, it was targeting computerisation of all 93 excise commissionerates by end March 2010.

“Already pilot projects are on in 6-7 excise comissionerates. After we complete the automation on the excise and service tax front, we will take up the next challenge of linking them to customs. Once this is done, the process of providing rebates will be simplified,” he said.

More Stories on : Exports & Imports | Exim Policy | Economy

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