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DGFT issues clarification on RCMC requirements for post-export remission-based schemes under FTP 2023

Shardul Nautiyal, Mumbai
Friday, October 11, 2024, 08:00 Hrs  [IST]

The Directorate General of Foreign Trade (DGFT) has issued Trade Notice No. 19/2024-25, dated October 4, 2024, to provide clarity regarding the Registration-Cum-Membership Certificate (RCMC) requirement for exporters under the Foreign Trade Policy (FTP) 2023. The notice, addressed to exporters, trade bodies, and various stakeholders, aims to resolve confusion surrounding the applicability of the RCMC for certain export promotion schemes, specifically those classified as post-export remission-based schemes.

Key clarifications from the notice stipulate RCMC requirements under FTP 2023. According to Paragraph 2.57 of FTP 2023, an RCMC is mandatory for exporters who apply for authorization to import/export or seek any benefits or concessions under the FTP. This applies to all exporters except those dealing with 'Restricted' items under the Indian Trade Classification (Harmonized System) [ITC (HS)] list. Exporters in this category are required to obtain an RCMC to avail benefits under export promotion schemes.

The DGFT distinguishes post-export remission-based schemes from other export promotion measures. Post-export remission schemes such as Duty Drawback, Rebate of State and Central Taxes and Levies (RoSCTL), and Remission of Duties and Taxes on Export Products (RoDTEP) are designed to remit duties or taxes paid on exported goods, thereby enhancing the global competitiveness of Indian products by refunding taxes incurred during production.

Contrary to other schemes where an RCMC is compulsory, exporters applying for benefits under remission-based schemes—like RoSCTL and RoDTEP—are not required to obtain an RCMC. This decision is intended to streamline processes for exporters seeking tax and duty remissions on exported goods. Exporters can continue to claim their benefits under these schemes without the administrative step of obtaining an RCMC.

The clarification is issued to ensure that exporters and stakeholders in the trade and industry sectors are fully informed about the specific requirements for availing benefits under different schemes in the FTP 2023. By distinguishing between standard export promotion measures and post-export remission schemes, the DGFT aims to alleviate any misunderstandings and simplify compliance for exporters.

Post-export remission schemes like RoDTEP and RoSCTL are critical to supporting India’s export sector, particularly by offsetting various taxes and duties incurred during production and logistics. The exclusion of an RCMC requirement for these schemes reduces the administrative burden on exporters, allowing them to access benefits more efficiently.

“The trade notice has been issued with the approval of the competent authority and is expected to provide clarity to a wide range of stakeholders, including exporters, trade associations, and regulatory bodies. For more details or queries, stakeholders can contact deputy director general of Foreign Trade (DDGFT), Deepak Jhalani, at deepak.jhalani@gov.in. This initiative reinforces the government’s ongoing efforts to enhance ease of doing business and promote exports by simplifying processes and ensuring clarity in policy implementation,” stated DDGFT.

 

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