Foreign Trade Policy To The Extent Relevant For Indirect Tax Law – Advanced Tax Laws and Practice Important Questions
Question 1.
ABC Ltd., an exporter whose export turnover for the year ended 31st March 2019 is ₹ 20.00 Lakhs, approaches you to discuss the conditions to be complied to become a Status Holder and to know about the privileges available to Status Holder if any Advise the exporter suitably.
Answer:
Status holders
With regard to the conditions to be complied to become a status holder, M/s ABC Ltd. is advised as below:
- Status recognition will depend on export performance.
- An applicant shall be categorized as the status holder on achieving export performance during the current and previous three financial years (for Gems & Jewellery Sector the performance during the current and previous two financial years)
- The export performance will be counted on the basis of FOB of export earning in freely convertible foreign currencies
- For granting status, export performance is necessary for at least two out of four years.
Export Performance shall be as per the table below:
| Status Category | Export Performance FOB/FOR (as converted) Value (in US$ million) |
| One Star Export House | 3 |
| Two-star Export House | 25 |
| Three-star Export House | 100 |
| Four Star Export House | 500 |
| Five-star Export House | 2000 |
Grant of Double Weightage
(1) The exports by IEC holders under the following categories shall be granted double weightage for calculation of export performance for grant of status.
- Micro, Small & Medium Enterprises (MSME) as defined in Micro, Small & Medium Enterprises Development (MSMED) Act, 2006.
- Manufacturing units having ISO/BIS.
- Units located in the North Eastern States including Sikkim and Jammu & Kashmir.
- Units located in Agri Export Zones.
(2) Double Weightage shall be available for grant of the One Star Export Flouse Status category only.
(3) A shipment can get double weightage only once in any one of the above categories.
Other conditions for grant of status:
- Export performance of one IEC holder shall not be permitted to be transferred to another IEC holder. Hence, calculation of exports performance based on disclaimer shall not be allowed.
- Exports made on a re-export basis shall not be counted for recognition.
- Export of items under Authorisation, including SCOMET items, would be included for calculation of export performance.
Accordingly, M/s. ABC Ltd. is advised to go through the above-stated conditions and determine its eligibility to become a status holder.
Foreign Trade Policy To The Extent Relevant For Indirect Tax Law Notes
- Focus areas in New Foreign Trade Policy
- Coverage of the Policy
- Various Export Promotion Schemes
- Exemption and Remission schemes (Inputs)
1. Advance Authorisation scheme
2. Duty-Free Import Authorisation
- Export Promotion Capital Goods (EPCG) scheme
1. Pre-Export EPCG
2. Post-Export EPCG
3. EPCG scheme for capital goods purchased in India
- Status Holder’s Scheme
- Reward/Incentive schemes
1. Merchandise Exports from India Scheme (MEIS)
2. Service Exports from India Scheme (SEIS)