The Central Board of Indirect Taxes and Customs (CBIC) has recently issued a significant circular announcing an amnesty scheme for one-time settlement of defaults in export obligations by Advance and Export Promotion Capital Goods (EPCG) authorization holders. This initiative aims to provide relief to exporters who are struggling to meet their export obligations.
As per CBIC notification No.32/2023-Customs, dated May 17, 2023, was issued by the Ministry to amend 13 Customs notifications relevant to Advance Authorization (AA) and Export Promotion Capital Goods (EPCG) Schemes. This is to put into effect the DGFT's Public Notice No. 02, dated April 1, 2023, which provided a procedure, under the category of regularization of bona fide defaults, in which all pending cases of default in meeting export obligation (EO) may be regularised by the authorization holder upon payment of applicable Customs duty, corresponding to the shortfall in EO. The maximum amount of interest payable is 100% of the exempted duties on which interest is payable, as provided in the previous Public Notice of April 1, 2023.
Under the amnesty scheme, it is crucial for exporters to be registered with the Directorate General of Foreign Trade (DGFT). DGFT registration serves as a vital requirement for availing the benefits of the amnesty scheme and participating in the rectification process for bona fide defaults.
Exporters who hold Advance Authorization or EPCG authorizations and wish to settle their pending export obligation default cases must ensure their registration with DGFT. The registration process ensures proper documentation and verification, enabling seamless communication between exporters and the regulatory authorities.
Once exporters are registered with DGFT, they can proceed with the settlement process for their default cases. The scheme requires payment of the applicable Customs duty, corresponding to the shortfall in export obligations, as specified in the Directorate General of Foreign Trade's Public Notice.
It is important to note that cases involving fraud, mis-declaration, or unauthorized diversion of material and/or capital goods are not covered by the amnesty scheme. The scheme solely focuses on resolving genuine defaults in export obligations.
The amnesty scheme allows exporters to rectify their export obligation defaults and avoid potential penal actions. By complying with the scheme's requirements and completing the payment process within the specified deadline, exporters can find relief and clarity regarding their pending export obligations.
Furthermore, the amnesty scheme promotes ease of doing business and supports the growth of India's export sector. By providing a streamlined process for default settlement, it contributes to the enhancement of manufacturing competitiveness and strengthens the overall export ecosystem.
The amnesty scheme introduced by the CBIC offers a significant opportunity for exporters to settle their default cases related to export obligations. By ensuring DGFT registration and following the prescribed procedures, exporters can avail the benefits of the scheme and rectify their bona fide defaults. Exporters are encouraged to take advantage of this amnesty scheme to effectively resolve their pending export obligation defaults. The scheme provides a path to compliance and facilitates the growth of the export industry in India.
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