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Urging exporters to go in for captive power generation, the five-year Exim policy has announced the provision of duty-free fuel for such power, ranging from 3-7 per cent of the free on board (FoB) value of exports. The move is part of the package of initiatives to reduce exporters’ transaction costs.
Commerce and industry minister Murasoli Maran said the packing credit rate has already been linked to prime lending rates so that the benefits of any further softening of interest rates will pass on automatically to exporters. He also said the Reserve Bank is examining the possibility of asking banks to treat at least the status holders as prime borrowers even for term-loans.
Among the other significant initiatives, the Exim policy has extended the period for realisation of export proceeds from 180 days to 360 days. It has also permitted direct negotiations of export documents which will help exporters save bank charges. Further, exporters will have the facility of 100 per cent retention in their EEFC accounts. However, all these facilities will be available to the status holders only.
Adoption and harmonisation of an 8-digit ITC(HS) code and commitment that the application for fixation of brand rate of drawback will be finalised within 15 days, are among the measures to reduce transaction costs.
A new commodity classification for imports and exports is also being adopted. The classification will be adopted by the Central Board of Excise and Customs and DGCI&S shortly. The common classification to be used by DGFT and CBEC is expected to eliminate the classification disputes and hence reduce transaction costs and time.
Moreover, Mr Maran said the environment & forests ministry is in the process of finalising the guidelines for regulating import of hazardous waste. Pointing out that same day licensing has been introduced in all the regional offices of DGFT, he announced further simplification of all schemes and a cut in the maximum fee limit for application under various schemes.
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