The Indian government has successfully recovered approximately Rs 852 crore under its amnesty scheme aimed at resolving defaults in export obligations by holders of advance and EPCG (Export Promotion Capital Goods) authorisations. An official disclosed that the recovery figures are expected to increase as data compilation progresses. The deadline for settling customs duty plus interest under this scheme was March 31.
“Under the scheme, 6,705 applications were filed, and according to provisional figures, about Rs 852 crore has been recovered. This amount is anticipated to rise further,” stated the official.
Despite this progress, several small exporters have appealed to the government to extend the scheme until September. SC Ralhan, President of the Ludhiana-based Hand Tools Association, highlighted that many small exporters couldn’t benefit from the scheme due to their commitments to make payments to MSMEs within 45 days.
The new foreign trade policy (FTP) introduced this scheme to assist exporters in settling their defaults on export obligations tied to advance and EPCG authorisations. It allows exporters to regularise pending cases by paying all exempted customs duties in proportion to their unfulfilled export obligations, along with interest at 100% of the exempted duties.
India’s merchandise exports saw a slight increase of 1% to $34.99 billion in April, even as the trade deficit expanded to a four-month high of $19.1 billion. Imports during the same period surged by 10.25% to $54.09 billion from $49.06 billion in April 2023, driven largely by a significant rise in gold imports.
For the fiscal year 2023-24, India’s total exports in goods and services reached a record high of $778.21 billion. Merchandise exports accounted for $437.1 billion, while services exports stood at $341.1 billion.
The amnesty scheme aligns with the “Vivad se Vishwas” initiative, which aims to resolve tax disputes amicably. It offers a unique opportunity for exporters who have struggled to meet their obligations under EPCG and Advance Authorisations, thus alleviating the financial burden of high duties and interest costs.
The EPCG scheme’s objective is to facilitate the import of capital goods necessary for producing high-quality goods and services, thereby enhancing India’s export competitiveness. This scheme permits the duty-free import of capital goods for pre-production, production, and post-production activities.
Similarly, the advance authorisation allows the duty-free import of inputs that are physically incorporated into export products. Exporters benefitting from these schemes must meet specific export obligations, and failure to do so results in penal provisions.
The government’s amnesty scheme provides crucial relief for exporters, enabling them to settle their defaults without enduring the heavy penalties typically associated with non-compliance. By extending the deadline, the government could offer further support to small exporters who are currently constrained by financial obligations to MSMEs.
As the amnesty scheme continues to facilitate the regularisation of pending cases, it is expected to boost exporters’ confidence and contribute to the overall growth of India’s export sector. The government’s proactive measures to support exporters through this scheme demonstrate a commitment to enhancing India’s position in global trade.
In conclusion, the amnesty scheme for exporters has proven effective in recovering significant amounts and aiding exporters in meeting their obligations. Continued support and potential extensions could further strengthen the export sector, driving economic growth and reinforcing India’s trade capabilities on the international stage.
