New Foreign Trade Policy : 2006-07

Foreign Trade Policy for the year 2006 – 07 was released by Mr. Kamal Nath, Union Minister, Commerce and Industry on 7th April, 2006. some of the important features of the policy are as under:

1. Duty Free Import Authorization (DFIA ) : This scheme will come into force from 1st May, 2006. A DFIA is issued to allow import of duty free inputs for se in export products. The entitlement is limited to the extent permitted under SION. This clubs the existing ALS and DFRC scheme. The added features of the scheme is that after completion of export obligation, the DFIA can be transferred after an endorsement by the Regional Licensing Authority to the effect that the export obligation has been fulfilled. The holder of a DFIA is free to transfer the duty free inputs and the scrip except those items which are subject to actual users conditions.

2. Export Promotion Capital Goods : This scheme has been made more flexible by extending the export obligation period by two years and by modifying the conditions of maintenance of average export performance.

3. FBT : A clause in the FTP has been added for the factorization of un-rebated service tax and FBT in various schemes for export promotion.

4. Remanufactured Goods : the remanufactured goods in the policy have been placed in the restricted list of imports requiring an import licence. The DGFT has issued a clarification that this restriction is only for re-manufactured goods and not to the second hand capital goods which are freely importable.

5. Refund of Excise Duty : The Ministry of Finance has announced a procedure so that refund of accumulated excise duty and service tax be disbursed to exporters quickly. Under this system, 80% of the refund will be paid within 15 days of making the claim after preliminary scrutiny. The balance will be paid within 45 days from the date of filing of the claim.

This system covers select category of exporters such as EOU, PSU, exporters with turnover of Rs. 5 Crores, star export houses, manufacturer exporters registered with C.E. Department having export turnover exceeding 1 crore or more.

6. Focus Product Scheme : This scheme allows duty credit facility at 2.5% of the FOB value of exports on 5% of export turnover on notified products.

7. Focus Market Scheme : This scheme allows duty credit facility at 2.5% of the FOB value of exports of all products to the notified countries.

The goods imported under these schemes and duty credit facility (Scrip) are freely transferable.

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Site updated on Thursday, April 27, 2006 9:07 AM