Gunjan Prabhakaran, Partner & Leader – Indirect Tax, BDO India
“The new Foreign Trade Policy, 2023 appears to be forward-looking and dynamic. The flexibility that it can be amended to address industry requirements is a testament to the fact that the Government realizes the need to keep evolving with the changing global requirements. A slew of measures have been announced, such as, no sunset of five years, the continuation of Advance Authorizations/ EPCG/ DFIA, reduction in fees for MSMEs, reduction in the threshold for star houses, merchandise trade for restricted goods, internationalization of trade in rupees, battery electric vehicle will be eligible for reduced obligation under EPCG, special Advance Authorization scheme for apparel and clothing sector, benefits and facilitation for the e-commerce sector, amnesty scheme for one-time settlement of default in export obligation by Advance Authorization and EPCG authorization holders, digitisation of applications under FTP, reduction in application fees for MSMEs, standardisation/ reduction of composition fees for extension of Advance Authorization. A thorough evaluation of the policy will be required to assess the benefits outlined in the policy.
Exporters engaged in the manufacture and export of proprietary products and not an AEO status holder would be much relieved with the extension of the “Self-ratification scheme for fixation of input-output norms” to 2-star and above status holders. Currently, the ratification of self-declared norms by authorities takes a long time which exposes the exporters to a risk of differential duty and interest or additional export obligation after importing inputs duty-free against Advance Authorisation as per self-declared norms.”
