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e Bulletin June2017
 
e-Bulletin
Chemexcil
e-Bulletin

June 2017 No. 014

Chairman's Desk

Satish-Wagh
SHRI SATISH W. WAGH
Chairman, CHEMEXCIL
 

Dear Member-exporters,

I have pleasure to bring to you the 14th issue of the CHEMEXCIL e-Bulletin for the month of June 2017, which contains the following activities undertaken by the Council and other useful information/Notifications, etc.

  1. Meeting of Shri Ajay Kadakia, Vice Chairman,Chemexcilalongwith ShriBhupendrabhai Patel, Regional Chairman, Chemexcil with Shri ArunJaitley, Minister of Finance, New Delhi wherein they discussed and submitted the concerns regarding the exports under GST regime on 27th June-2017
  2. Chemexcil's participation in Chemspec Europe 2017 Exhibition held on 31st May, 2017 to 1st June, 2017 at Munich, Germany.
  3. Stakeholder'sConsultation meeting organized by the Additional DGFT Mumbai, Department of Commerce, regarding the impending commencement of Free Trade Agreement (FTA) negotiations between the Eurasian Economic Union (EAEU) and India, with the state government officials, Chemexcil and exporters in Maharashtra on 8th June, 2017.
  4. Brief report of seminar on "GST Trade Awareness" held on 9th June 2017 at Hotel Ramada, Ahmedabad organized by CHEMEXCIL.
  5. Suggestions / Requests submitted by CHEMEXCIL in the Board of Trade meeting held on 20th June 2017 at New Delhi.


I hope that you would find the newsletter informative and useful. The Secretariat looks forward to receiving your valuable feedback and suggestions so as to enable us to improve this e-bulletin further.



With regards,

SHRI SATISH W. WAGH
Chairman,
CHEMEXCIL

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Chemexcil Activities

Meeting of Shri Ajay Kadakia, Vice Chairman,Chemexcil with Shri ArunJaitley, Minister of Finance, New Delhi on 27th June 2017

Standing from left Mr. Bhupendrabhai Patel, Regional Chairman, Chemexcil, Mr. Ajay Kadakia, Vice Chairman Chemexcil and Mr. Shankar Patel, President, The Green Environmental Services Co.Op Soc. met Shri. Arun Jaitley, Minister of Finance, New Delhi and discussed and submitted the concerns regarding the exports under GST regime on 27th June-2017.

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Meeting on various chemical trade related issues with Honorable Minister of State Chemical & Fertilizers

Standing from left Mr. Bhupendrabhai Patel, Regional Chairman, Chemexcil, Mr. Shankar Patel, President, The Green Environmental Services Co.Op Soc. Shri Mansukh L. Mandaviya, Minister of State for Chemicals & Fertilizers,Mr. Ajay Kadakia, Vice Chairman Chemexcil and Dr. Tiwari, Regional Director, Chemexcil New Delhi.

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Chemexcil's Participation in Chemspec Europe-2017 exhibition dated 31st May-2017 and 1st June-2017 at Munich, Germany

From left Shri Ramu Deora, Past Chairman,Chemexcil, Shri Sugandh Rajaram, , Consulate General of India, Munich, Germany, Shri S.G. Bharadi, Executive Director, Chemexcil, Shri Ravi Raghavan, Editor from Chemical Weekly, Shri Prafulla Walhe, Dy. Director, Chemexcil, Shri Asheesh Gupta,Consul (E & C ), Consulate General of India, Munich, Germany.

CHEMEXCIL participated in Chemspec Europe-2017 exhibition being organized by M/s. MACK BROOKS EXHIBITIONS LIMITED UK, 31st May -1st June-2017 at hall A5 and A6 at Munich Trade Fair Centre in Germany. This project was sanctioned under MAI scheme. Altogether 49 Chemexcil member-exporters participated in this exhibition. CHEMEXCIL booked 957.5 sq. mt. space in hall A5 and A6. 403.5 Sq.mt. space was converted in India Pavilion, Branding INDIA. 5000+ visitors from various countries and regions visited this exhibition. Target visitors :-Agrochemical intermediates, biotechnology, Catalysts, Colours& Pigments, Flavours& Fragrances, Organic Intermediates, Photographic Chemicals and Water treatment chemicals., International Trade Missions are the target visitors. Chemexcil Pavilion was inaugurated by Mr. Sugandh Rajaram, Consulate General of India, Munich, Germany, on 31st May-2017at 10.00am along with Mr. S.G. Bharadi, Executive Director, Chemexcil.

Glimpses of Chemspec Europe-2017
Shri Sugandh Rajaram, Consulate General of India, Munich, Germany, is inaugurating Chemexcil Pavilion along with ShriRamuDeora, Past Chemexcil, Chairman and Shri S.G. Bharadi, Executive Director, Chemexcil and Chemexcil exhibitors at Chemspec Europe-2017 (Speciality Chemical Show) at Hall A-6, Munich Trade Center, Munich, Germany on 31st May-2017.
 
Shri Sugandh Rajaram,Consulate General of India, Munich, Germany, Shri S.G. Bharadi, Executive Director, Chemexcil visiting Indian Exhibitor.
 
View of India Pavilion at Chemspec Europe-2017 Exhibition
 
 

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Stakeholder consultation meeting on Eurasian Economic Union (EAEU) and India FTA in Mumbai on 8th June, 2017

From left Mr. S.K. Ranjan, Dy. Sec. EP (CAP), MoC, Dr. Ram Upendra Das –Professor at the Research and Information System for Developing Countries (RIS), New Delhi, Mr. Sunil Kumar, IAS, Joint Secretary, MOC&I, Dept. of Commerce, Government of India, Mr. Vijay Shankar Pandey, Under Secretary, EP (CAP), MoC

Additional DGFT Mumbai Department of Commerce conducted a Stakeholder's Consultation meeting, regarding the impending commencement of Free Trade Agreement (FTA) negotiations between the Eurasian Economic Union (EAEU) and India, with the state government officials, Chemexcil and exporters in Maharashtra on 8th June, 2017 at the Cultural Hall, 4th floor, Yashwantrao Chavan Centre, Gen. Jagannath Bhosale Marg, Nariman Point, Mumbai-21.

Presentation on Free Trade Agreement (FTA) negotiations between the Eurasian Economic Union (EAEU) and India was made by Mr. Sunil Kumar, IAS, Joint Secretary, MOC&I, Dept. of Commerce, Government of India and Dr. Ram Upendra Das –Professor at the Research and Information System for Developing Countries (RIS), New Delhi jointly stating the trade related data and importance of this FTA and requested industry to give inputs on their product duty concessions.

It was informed that Policy of integration in the post-Soviet space is one of key directions of contemporary foreign policy of Russia. The EAEU is based on the Customs Union of Russia, Belarus and Kazakhstan. Besides these three states, Armenia and Kyrgyzstan also joined the EAEU. Russia is a key member state of the EAEU but Russia also considers the Union as a both economic and political project. Eurasian integration seems to be an important ideological element in Russian foreign policy, underlining special role of Russia in the world – role of a connecting link between the East and the West. Development of trade and investment cooperation between India and the Eurasian Economic Union is a key factor in their bilateral cooperation. Russia-India bi-lateral trade volume has decreased by 11.8% during 2016 and amounted to $ 3.4 billion. Exports from Russia fell by 17.9% ($ 2.2 billion), while Russia's imports from India increased by 3.2% to $ 1.2 billion.

With view to boost economic and trade ties between India and member countries of the Eurasian Union, both the parties had constituted a study group to undertake a Joint Feasibility study on FTA between India and EAEU and its member states.

The Government is presently in the process of finalizing the tariff schedules to be taken up in the next round of negotiations. Towards this the Government is seeking inputs from stakeholders on inclusion of items in the "Negative List" where it is felt that interest of Indian manufacturer could be adversely impacted.

Another presentation on International North-South Transport Corridor (INSTC) was made by Mr. Sunil Kumar, IAS, Joint Secretary, MOC&I, Dept. of Commerce, Government of India it was briefed that Government is in final round of discussion for International North-South Transport Corridor (INSTC).

INSTC is a multimodal transportation established in September 2000 in St. Petersburg, by Iran, Russia and India for the purpose of promoting transportation cooperation among the Member States. This corridor connects India Ocean and Persian Gulf to the Caspian Sea via Islamic republic of IRAN, and then is connected to St. Petersburg and North Europe via Russian Federation.

The INSTC was expanded to include eleven new members, viz. Republic of Azerbaijan, Republic of Armenia, Republic of Kazakhstan, Kyrgyz Republic, Republic of Tajikistan, Republic of Turkey, Republic of Ukraine, Republic of Belarus, Oman, Syria, Bulgaria.

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Chemexcil Seminar on "GST Trade Awareness" at Hotel Ramada, Ahmedabad

Shri Bhupendra Patel, Regional Chairman, Chemexcil welcoming the speaker, Shree Aseem Kumar Vaibhav, IRS, Deputy Commissioner, Service tax, Ahmedabad during seminar "GST trade awareness" held on 09.06.2017 at Hotel Ramada, Ahmedabad.
 
Mrs. Vaishali Zinzuwadia, Regional Director, Chemexcil addressing the gathering during the seminar "GST trade awareness" held on 09.06.2017 at Hotel Ramada, Ahmedabad

Council had organised awareness programme on GST in association with Service Tax Commissionerate, Ahmedabad.

The Office of Commissioner of Service Tax, Ahmedabad had nominated Shri Aseem Kumar Vaibhav, IRS, Deputy Commissioner, Service Tax, and Ahmedabad as a Key speaker of this Seminar.

The officer covered important topics such as -Introduction to GST, Overview of GST, Registration, Returns, Refunds, GSTN etc. Total 100 Member Exporters attended this seminar. The session was quite interactive as the member exporters had come prepared with their questions-queries. All the queries were satisfactorily answered by the Deputy Commissioner. Many members were of a notion that once the GST is implemented, maximum queries will be generated. So, there were request from the members to organize one more Seminar after GST is implemented.

Few members felt that it will smoothen the exports. Suggestions were made to organise seminar on "E-WAY" and "Returns".

The seminar was well appreciated by all our member exporters.

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EXPORT AWARDS FUNCTION OF GDMA AT AHMEDABAD

The Gujarat Dyestuff Manufacturers Association (GDMA) organized its Export Award Presentation Function on June10th, 2017 at Rajpath Club, Ahmedabad.

GDMA has invited the Chairman of Chemexcil Mr. Satish Wagh to grace the occasion as "Guest of Honor". The Chief Guest for this occasion was Mr. Mansukhbhai Mandaviya- Hon'ble, Minister of State (Chemical & Fertilizers) Ministry of Chemicals & Fertilizer, Govt. of India. Because of busy schedule and other meetings Hon'ble Minister -- Mr. Mandaviya was not able to join this function. The awards were distributed by Mr. Satish Wagh, Chairman Chemexcil, Mr.Bipin Patel, Mr. Bhupendra Patel and other committee members of GDMA. The stalwarts from the Dyes Industry viz. Mr. Shankar Patel, Mr. Shailesh Patwari, Mr. Harish Bhuta, Mr. Yogesh Parikh and many more were present to grace this occasion.

Awards pertaining to highest self-manufacturing turnover from Domestic and Exports, Exporter of the year for earning highest foreign exchange, direct export, Domestic sale, and Self-manufactured direct export were presented. While special trophies for self-manufactured domestic sale of Dyes and Dye Intermediates wort 15 crores and above and 25 crores and above for the year 2015-16 were also presented along with certificate of merit.

Few known award winners were M/s Longson& Kiri, Jemby Chem, AvaniDyechem, UshantiColorchem, Pasupati Industries, Macson Products, Kutch Chemicals, Sarna Group, Asahi Songwon, Panoli Intermediates, Aksharchem etc.

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Chemexcil submission for Board of Trade meeting on 20/06/2017 at New Delhi

Agenda:

Mid-term review of Foreign Trade Policy, 2015-2020 & re-aligning of FTP schemes in line with rollout of GST

  1. Status of  Export Incentives  under GSP Framework/ Re-alignment of Schemes
  2. Presently under FTP, export incentives can be broadly classified into:

    • Duty Exemption Schemes (e.g. advance authorization, EPCG etc)
    • Promotional Measures (MEIS, SEIS)

    The incentives under these schemes are mostly by way of exemptions with parallel notifications under relevant legislations (customs and excise).

    UNDER GST FRAMEWORK:

    • Advance Authorisation:   Only basic customs duty will be exempted on imports made under Advance Authorisation. IGST will have to be paid on imports, which will block funds of exporters as refund will be available only after exports.
    • MEIS:MEIS will  be used only for payment of basic customs duty there by reducing  utilization and attractiveness, as currently Chapter 3 schemes are  freely transferable and usable for payment of custom duty, excise duty and service tax.    In case GST be allowed to be debited in duty credit scrips such as Merchandise Exports from India Scheme (MEIS) that will be helpful and improve cash flows.

    Our Request:
    In view of above, there is need to re-align the incentives, so exporters fund flows are not impacted.  Drawback should also be increased as it was reduced to just 1.5% without any corresponding reduction in BCD.  Trades concerns need to be addressed in the upcoming review of FTP by re-aligning the schemes.

  3. Request for continued Incentives Support To Overcome Trade Barriers In Overseas Markets:
  4. Support is needed from government as exporters are facing following barriers in overseas markets which is impacting their competitiveness:

    • Partial GSP benefit by EU: -   Non availability of GSP benefit by EU on organic & inorganic chemicals which makes Indian exports un-competitive due to incidence of full duty on organic and inorganic chemicals.
    • India has FTA with ASEAN nations, but the concessions are only limited. Whereas supplies from China to these ASEAN nations is against NIL duty which impacts competitiveness.
    • There is a VAT of 13 to 17 % on Indian exports to China which is a major hindrance.
    • OFAC sanctions negating efforts to drive exports
    • Brazil-   as import duties on fatty alcohols increased sharply from 2% to 14%.
    • Export tax imposed by Indonesia and Malaysia on the raw materials making Indian Oleochemicals non-competitive due to increased input costs.
    • 'REACH' is a major trade barrier, exporters need financial support on REACH which is presently very much insufficient since government is offering only 50% on ECHA fees whereas, major cost is the expenses incurred for data access. Exporter should be compensated adequately to remain competitive in EU.

    Our Request:

    To overcome the above external barriers while exporting to the impacted markets, incentives be sufficiently increased even under GST framework, which will improve competitiveness of the exporters and boost exports from India.

  5. Expansion Of Interest  Equalization Scheme  by Including more tariff Lines for Non-MSME's  &  cover   Merchant Exporters
  6. For Non-MSME exports, scheme is restricted to only 416 tariff lines  (at ITC HS code of 4 digit).  In-fact,  in chemicals its only 10 on tariff lines.

    Besides, the scheme is not be available to merchant exporters many of whom are our member-exporters.

    Our Request:

    Export sector should be treated as priority sector which obliges banks to lend a specified share to the sector at cheaper rates which will improve competitiveness  of the exporters.

    Regarding interest expansion of interest equalisation scheme, the Council has sent representation to the MOC&I for inclusions of more tariff lines and also access of this scheme to merchant exporters which will be helpful.  

    We request inclusion of more tariff lines and also access of this scheme to merchant exporters which will improve the competitiveness of the exporters.

  7. Import of technical pesticides:
  8. Import of technical pesticides is restricted only to approved sources which is a hindrance. This greatly restricts the production capabilities of Indian End product Manufacturers as they are bound to use only those materials that are available in India or imported via approved sources.

    Our request is to allow free import of active ingredients (without the need for registration) under advance authorization scheme. This will boost exports.

  9. Solution for Persistent Technical Difficulties Related to DGFT Server/ Icegate/ BRC
  10. Exporters are regularly facing issues on account of  non-reflecting shipping bill, delays in online EODC, MEIS application, uploading of eBRC by Banks etc.  As a result exporters are unable to avail the incentives or close licenses.    Email reminders or phone calls to ICEGATE/ DGFT EDI/ NIC sections are seldom replied. 

    Our Request:

    The existing system is not working due to lack of responses and delays in resolution of query. There is a need to have dedicated EDI/ ICEGATE/ NIC personnel who are available to interact with the exporters and help them.

  11. Caution Listing Of Exporters:
  12. RBI is periodically issuing caution list of all exporters preventing them from doing normal banking transactions namely handling of import-export bills, disbursement of pre and post shipment credits, booking of foreign exchange etc.

    The exporters which are having good track record of realization of foreign exchange also being caution listed due to the problem related to uploading in the EDI system of AD and RBI under EDPMS. It is suggested that exporters who are having good track record should not be put under caution listing and subject to unnecessary scrutiny.

  13. Environment Related Controls
  14. It seems that the process for obtaining "No Increase in Pollution Load" certificate / permission from the State Pollution Control Board", the procedure in principle remain unaltered seeking prior environmental clearance for expansion with increase in the production capacity. The notification has not made any impact on ground reality and units are subject to same scrutiny as usual. 

    Our suggestion is that well established manufacturing unit with good track record and ISO accredited certified 14001:2015 should be exempted from such lengthy procedure of environmental clearance and only intimation to SPCB should suffice
    Other issues like closure of units,   installation of online monitoring system, waste disposal etc are already highlighted to the Ministry and await resolution.

  15. Business  with Countries on OFAC List
  16. OFAC sanctions are a major hindrance to exports.  This restricts Indian exporters from doing business with these countries even though some of these countries are in MEIS list.
    We can have some arrangements with banks to transact in INR with these countries like the Iran Rupee Payment mechanism which will also continuation of business.

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OTHER SUGGESTIONS FOR SIMPLIFICATION OF PROCESS / REDUCTION IN TRANSACTION COST

  1. Prompt/ Timely fixation of Norms of Chemical sector.

    Council has been following up with DGFT on various long-pending cases of Norms fixation.  Due to such delays exporters are not able to redeem the authorisations. They risk being included in DEL and also have to give BG in customs for clearance which impacts cash flows.  Norms cases of chemicals sector be disposed of speedily within reasonable time frame which will be a big help to exporters. Further to ease the timelines, DGFT RA's can be delegated to finalise Ad-hoc norms.

  1. Timelines  for uploading of S/B's on DGFT server for MEIS
  2. Transmission of shipping bills by Customs to DGFT server, takes a long time. Exporters have to follow up for getting these activities done, especially for Hazira Port and Petropol customs. This delays the application of MEIS and affects working capital. 

  3. Other Suggestions for Ease of Doing business for saving time and reducing transaction costs
  4. For ease of doing business, following are requested:

    • Advance authorisation / EODC from DGFT: Currently collected personally from DGFT. Needs to be On Line
    • Advance authorisation application: To eliminate submission of hard copies to DGFT.
    • MEIS: To eliminate submission of hard copies to DGFT.  MEIS can also be issued in digital form
    • Registration of Licences: Physical Registration of Advance authorization ?for Imports and MEIS in the respective Ports to be eliminated.
    • RA To Issue of Advance release order (ARO)   On Line
    • RA To issue  revalidation On Line
    • To eliminate physical submission of CA certificates.
    • To eliminate physical submission of documents for Clubbing of advance authorisation under similar customs notification.
    • Brand rate:   Brand rate application and settlement needs to be taken On Line.

Above steps in line with ease of doing business will reduce paper work, save time and reduce transaction costs.

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Exim Updates

Duty Drawback- Amendments effective from 1.7.2017 to the All Industry Rates of Duty Drawback and other Drawback related changes.

EPC/LIC/DBK 4th July 2017
 
TO ALL THE MEMBERS OF COUNCIL
 

Duty Drawback- Amendments effective from 1.7.2017 to the All Industry Rates of Duty Drawback and other Drawback related changes.

Dear Members,

Kindly note that CBEC has issued Circular No. 22/2017-Customs regarding Amendments effective from 1.7.2017 to the All Industry Rates of Duty Drawback and other Drawback related changes.

Some of the important transition arrangements as per above-said circular are reproduced below for your convenience-

a) Transition period:

In order to ensure smooth transition to the GST regime, Government has allowed the extant Duty Drawback scheme to continue for a period of three months i.e. from 1.7.2017 to 30.9.2017.

The exporter may, for exports made during this period, continue to claim the composite rates i.e. rates and caps given under columns (4) and (5) respectively of the Schedule of AIRs of duty drawback, subject to certain additional conditions. During the transition period, exporters can also claim Brand rate of duty/tax incidence as they have been doing earlier. The conditions imposed for claiming these composite rates aim to ensure that the exporters do not claim composite AIRs of duty drawback and simultaneously avail input tax credit of Central Goods and Services Tax (CGST) or Integrated Goods and Services Tax (IGST) on the export goods or on inputs and input services used in manufacture of export goods or claim refund of IGST paid on export goods. Further, an exporter claiming composite rate shall also be barred to carry forward Cenvat credit on the export goods or on inputs or input services used in manufacture of export goods in terms of the CGST Act, 2017. The exporters have to give a declaration and certificates as prescribed in this Notification at the time of export. Similar checks shall apply while determining the Brand rate of drawback. While a transition period of three months has been allowed, the exporters shall have an option to claim only Customs portion of AIRs of duty drawback i.e. rates and caps given under column (6) and (7) respectively of the Schedule of AIRs of duty drawback and avail input tax credit of CGST or IGST or refund of IGST paid on exports.

(b) Changes in AIRs:

For chemical products, there are no changes as of now.

Members are requested to take note of the above circular provisions. For full text of the circular, please download using below link-http://www.cbec.gov.in/resources//htdocs-cbec/customs/cs-circulars/cs-circulars-2017/circ22-2017cs.pdf

Thanking You,

Yours faithfully,
(S.G. BHARADI)
Executive Director
CHEMEXCIL
Encl : Circular

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V. IMP - Export procedures under GST Regime (Format of LUT / Bond, Sealing of containerized cargo etc.)

EPC/LIC/Export_Procedure_GST 3rd July 2017
 
TO ALL THE MEMBERS OF COUNCIL
 

V. IMP - Export procedures under GST Regime (Format of LUT / Bond, Sealing of containerized cargo etc.)

Dear Members,

In the GST regime, the governing provisions related to exports are contained in section 16 of the Integrated Goods and Service Tax Act, 2017 (IGST Act). Supplies of goods and services for exports have been categorized as 'Zero Rated Supply' implying that goods could be exported under bond or Letter of Undertaking without payment of integrated tax followed by claim of refund of unutilized input tax credit or on payment of integrated tax with provision for refund of the tax paid.

With the onset of GST, existing procedures relating to export of goods viz. claim of rebate/refund, stuffing of containers at the factory, warehouse or any other place from where the goods are intended to be exported etc. would require review of the existing procedures.

In this regard, the CBEC  has issued  Circular No. 26/2017-Customs dated 1st July 2017 and Notification No. 15/2017 – Central Tax  1st July, 2017   regarding  Export procedure and sealing of containerized cargo/   Format of LUT or Bond.

The gist of  above circulars/ notifications and their important portions are reproduced below for your convenience.

Procedure of Export (Submission of LUT/Bond,  Format etc)

Any person making zero rated supply (i.e. any exporter) shall be eligible to claim refund under either of the following options, namely: -

 Exporter may supply goods or services or both under bond or Letter of Undertaking, subject to such conditions,  safeguards and procedure as may be prescribed, without payment of integrated tax and claim refund of unutilized input tax credit; or

For exporters availing the option to supply goods or services for export without payment of integrated tax. Such exporters  shall furnish, prior to export, a bond or a Letter of Undertaking in FORM GST RFD-11 to the jurisdictional Commissioner.

The relevant Rule as incorporated under 96A is reproduced below:

96A Refund of integrated tax paid on export of goods or services under bond or Letter of Undertaking.- (1) Any registered person availing the option to supply goods or services for export without payment of integrated tax shall furnish, prior to export, a bond or a Letter of Undertaking in FORM GST RFD-11 to the jurisdictional Commissioner, binding himself to pay the tax due along with the interest specified under sub-section (1) of section 50 within a period of — (a) fifteen days after the expiry of three months from the date of issue of the invoice for export, if the goods are not exported out of India; or(b) fifteen days after the expiry of one year, or such further period as may be allowed by the Commissioner, from the date of issue of the invoice for export, if the payment of such services is not received by the exporter in convertible foreign exchange.

(2) The details of the export invoices contained in FORM GSTR-1 furnished on the common portal shall be electronically transmitted to the system designated by Customs and a confirmation that the goods covered by the said invoices have been exported out of India shall be electronically transmitted to the common portal from the said system.

(3) Where the goods are not exported within the time specified in sub-rule (1) and the registered person fails to pay the amount mentioned in the said sub-rule, the export as allowed under bond or Letter of Undertaking shall be withdrawn forthwith and the said amount shall be recovered from the registered person in accordance with the provisions of section 79.

(4) The export as allowed under bond or Letter of Undertaking withdrawn in terms of subrule (3) shall be restored immediately when the registered person pays the amount due.

(5) The Board, by way of notification, may specify the conditions and safeguards under which a Letter of Undertaking may be furnished in place of a bond.

(6) The provisions of sub rule (1) shall apply, mutatis mutandis, in respect of zero-rated supply of goods or services or both to a Special Economic Zone developer or a Special Economic Zone unit without payment of integrated tax.";

The formats for furnishing bond or LUT for export of goods have been separately notified and are attached herewith for easy reference.

For the option (a) above, procedure to file refund has been outlined in the Central Goods  and Service Tax Rules, 2017.   The exporter claiming refund of unutilized input tax credit will file  an application electronically through the Common Portal, either directly or through a Facilitation Centre notified by the GST Commissioner. The application shall be accompanied by documents as prescribed in the said rules. Application for refund shall be filed only after the export manifest or an export report, as the case may be, is delivered under section 41 of the Customs Act, 1962 in respect of such goods.

 Exporter may supply goods or services or both, subject to such conditions, safeguards and procedure as may be prescribed, on payment of integrated tax and claim refund of such tax paid on goods or services or both supplied, in accordance with the provisions of section 54 (Refunds) of the Central Goods and Services Tax Act or the rules made there under (i.e. the Central Goods and Service Tax Rules, 2017).

For the option (b), broadly the procedure is that a registered person shall not be required to file any application for refund of integrated goods and services tax paid on supply of goods for exports. The shipping bill, having inter-alia GST invoice details, filed by an exporter shall be deemed to be an application for refund of integrated tax paid on the goods exported out of India and such application shall be deemed to have been filed only when the person in charge of the conveyance carrying the export goods duly files an export manifest or an export report covering the number and the date of shipping bills or bills of export and the applicant has furnished a valid return in FORM GSTR-3.  The details of the relevant export invoices contained in FORM GSTR-1 shall be transmitted electronically by the common portal to the Customs system and the said system shall in turn electronically transmit back to the common portal a confirmation that the goods covered by the said invoices have been exported out of India. Upon receipt of information regarding furnishing of valid return in FORM GSTR-3 from the common portal, the Customs system shall process the claim for refund and an amount equal to the integrated tax paid in respect of each shipping bill or  bill of export shall be electronically credited to the bank account of the applicant mentioned in his registration particulars.

Government has allowed a grace period to the registrants to file returns under the new GST Law. Therefore, this refund procedure shall as a consequence come into operation only when the registrants file the above mentioned returns. Further, the exporters are free to avail option (a) or option (b). The refund shall be governed by the provisions of the section 16 of
the IGST Act.

In order to ensure smooth transition from the earlier export procedure to the procedure being laid down for export of goods under the GST regime, the existing Shipping Bill formats (both manual/ electronic) have been modified to make them compliant with the IGST law. New formats of the Shipping Bill have been made applicable already. ARE-1 procedure which was being followed is dispensed with except in respect of commodities to which provisions of Central Excise Act would continue to be applicable

 Sealing of Containers

At present, there are three categories of containers which arrive at the port/ICD: 

  • Containers stuffed at factory premises or warehouse under self-sealing procedure.
  • Containers stuffed / sealed at factory premises or warehouse under supervision of central excise officer.
  • Containers stuffed and sealed at Container Freight Stations/ Inland Container Depot.

    For the sake of uniformity and ease of doing business, CBEC has decided to simplify the  procedure relating to factory stuffing hitherto carried out under the supervision of the Central Excise officers. It has been decided to do away with the sealing of containers with export goods by CBEC  officials. Instead, self-sealing procedure shall be followed subject to the following: 
  • The exporter shall be under an obligation to inform the details of the premises whether a factory or warehouse or any other place where container stuffing is to be carried out, to the jurisdictional customs officer.
  • The exporter should be registered under the GST and should be filing GSTRI and GSTR2.  Where exporter is not a GST registrant, he shall bring the export goods to a Container Freight Station/Inland Container Depot for stuffing and sealing of container. However, in certain situations, an exporter may follow the self-sealing procedure even if he is not required to be registered under GST Laws. Such an exception is available to the Status Holders recognized by DGFT under a valid status holder certificate issued in this regard.
  • Any exporter desirous of availing this procedure shall inform the jurisdictional Custom Officer of the rank of Superintendent or Appraiser of Customs, at least 15 days before the first planned movement of a consignment from his/her factory/ premises, about the intention to follow self- sealing procedure to export goods from the factory premises or warehouse.

The jurisdictional Superintendent or an Appraiser or an Inspector of Customs shall visit the premises from where the export goods will be stuffed & sealed for export. The jurisdictional Superintendent or Inspector of Customs shall inspect the premises with regard to viability of stuffing of container in the premises and submit a report to the jurisdictional Deputy Commissioner of Customs or as the case may be the Assistant Commissioner of Customs within 48 hours. The jurisdictional Deputy Commissioner of Customs or as the case may be the Assistant Commissioner of Customs shall forward the proposal, in this regard to the Principal Commissioner/Commissioner of Customs who would grant permission for selfsealing at the approved premises. Once the permission is granted, the exporter shall furnish only intimation to the jurisdictional Superintendent or Customs each time self-sealing is carried out at approved premises. The intimation, in this regard shall clearly mention the place and address of the approved premises, description of export goods and whether or not any incentive is being claimed.

Where the visit report of the Superintendent or an Appraiser or an Inspector of Customs regarding viability of the stuffing at the factory/ premises is not favorable, the exporter shall bring the goods to the Container Freight Station /Inland Container Depot/Port for sealing  purposes. Self-Sealing permission once given by a Principal Commissioner/Commissioner of Customs shall be valid for export at all the customs stations. The customs formation granting the self sealing permission shall circulate the permission along with GSTIN of the exporter to all Custom Houses/Station concerned.

Transport document for movement of self-sealed container by an exporter from factory or warehouse shall be same as the transport document prescribed under the GST Laws. In the case of an exporter who is not a GST registrant, way bill or transport challan or lorry receipt shall be the transport document.

The exporter shall seal the container with the tamper proof electronic-seal of standard specification. The electronic seal should have a unique number which should be declared in the Shipping Bill. Before sealing the container, the exporter shall feed the data such as name of the exporter, IEC code, GSTIN number, description of the goods, tax invoice number,  of the authorized signatory (for affixing the e-seal) and Shipping Bill number in the electronic seal. Thereafter, container shall be sealed with the same electronic seal before leaving the premises.

The exporter intending to clear export goods on self-clearance (without employing a  Customs Broker) shallfile the Shipping Bill under digital signature.

All consignments in self-sealed containers shall be subject to risk based criteria and intelligence, if any, for examination / inspection at the port of export. At the port/ICD as the case may be, the customs officer would verify the integrity of the electronic seals to check for tampering if any enroute. The Risk Management System (RMS) is being suitably revamped to improvise the interdiction/ examination norms. However, random or intelligence based selection of such containers for examination/scanning would continue.

CBEC  has decided that the above revised procedure regarding sealing of containers shall be effective from 01.09.2017. A future date has been prescribed since the returns under GST have been   permitted to be filed by 10.09.17 and also with the purpose to give enough time to the stakeholders to adapt to the new procedures. Therefore, as a measure of facilitation, the existing practice of sealing the container with a bottle seal under Central Excise supervision or otherwise would continue. The extant circulars shall stand modified on 01.09.2017 to the extent the earlier procedure is contrary to the revised instructions given in this circular.

The above-said circulars and notifications are available on below link for download:

http://www.cbec.gov.in/resources//htdocs-cbec/customs/cs-circulars/cs-circulars-2017/circ26-2017cs.pdf

http://www.cbec.gov.in/resources//htdocs-cbec/gst/notfctn-15-central-tax-english.pdf

Member-exporters are requested to take note of above points  regarding export under Bond/ LUT,  Self Sealing etc and do the needful accordingly.
In case of issues/ feed-back, please mail us on  balani.lic@chemexcil.gov.in  & Deepak.gupta@chemexcil.gov.in .

Thanking You,

Yours faithfully,

(S.G. BHARADI)
Executive Director
CHEMEXCIL

Encl : http://chemexcil.in/uploads/files/circ26-2017cs.pdf
http://chemexcil.in/uploads/files/notfctn-15-central-tax-english.pdf
http://chemexcil.in/uploads/files/FormGSTRFD11.doc
http://chemexcil.in/uploads/files/Bond-LUT-Format-for-exports.doc

BACK

USTR Announces Results of the 2016/17 Annual GSP Review

EPC/LIC/US-GSP 30th June 2017
 
TO ALL THE MEMBERS OF COUNCIL
 

USTR Announces Results of the 2016/17 Annual GSP Review

Dear Members,

We have received communication  from the Department of Commerce  that  Embassy of India, Washington has informed  that on   29 June 2017, the office of United States Trade Representative has announced the results of 2016/17 Annual GSP [Generalized System of Preferences] Review.

The outcomes pertaining to India and also  Chemical industry are as follows:

  1.  The USTR has decided to include the following four products in the GSP program: Rolled/flaked grains of cereals (HTS: 1104.19.90); Saturated acyclic monocarboxylic acids (HTS: 2915.90.18); Finishing agents, dye carriers used in leather (HTS: 3809.93.50); and Cellulose nitrates (HTS: 3192.20.00).
  2. The USTR has also decided to remove Glycine (HTS: 2922.49.40.20) ?from the GSP program?. [In 2016, India accounted for 37 percent [$7.9 million] of total U.S. imports of this product.]
  3. One product from India, namely Heterocyclic aromatic or modified aromatic pesticides with nitrogen hereo-atoms (HTS: 2933.99.22) has been granted competition need limitation [CNL] waiver.
  4. Another   59 products from India have been granted de-minimus waiver.?


The results of the 2016/17 Annual GSP Review are also  attached for your reference.

Members are requested to take note of the same.

Thanking you,

Yours faithfully,
( S.G.BHARADI )
EXECUTIVE DIRECTOR
CHEMEXCIL

Encl : Results of GSP Annual Review 2016-17

BACK

IGST Rates for Goods & Services/Exemptions/ Reverse Charge etc

EPC/LIC/IGST 30th June 2017
 
TO ALL THE MEMBERS OF COUNCIL
 

IGST Rates for Goods & Services/Exemptions/ Reverse Charge etc

Dear Members,

Kindly note that  CBEC has issued several notifications pertaining to IGST Rates for  Goods,   services, exemptions, reverse charge etc.

The Gist of notifications available on   CBEC portal related to IGST rates are as follows:

Integrated Tax (Rate) Notifications

Notification No. & Date of Issue

Subject

14/2017-Integrated Tax (Rate) ,dt. 28-06-2017

To notify the categories of services the tax on inter-State supplies of which shall be paid by the electronic commerce operator

13/2017-Integrated Tax (Rate) ,dt. 28-06-2017

To notify specialised agencies entitled to claim a refund of taxes paid on the notified supplies of goods or services or both received by them under IGST Act

12/2017-Integrated Tax (Rate) ,dt. 28-06-2017

To notify the supplies not eligible for refund of unutilized ITC under IGST Act

11/2017-Integrated Tax (Rate) ,dt. 28-06-2017

To notify the supplies which shall be treated neither as a supply of goods nor a supply of service under the IGST Act

10/2017-Integrated Tax (Rate) ,dt. 28-06-2017

To notify the categories of services on which integrated tax will be payable under reverse charge mechanism under IGST Act

09/2017-Integrated Tax (Rate) ,dt. 28-06-2017

To notify the exemptions on supply of services under IGST Act

08/2017-Integrated Tax (Rate) ,dt. 28-06-2017

To notify the rates for supply of services under IGST Act

07/2017-Integrated Tax (Rate),dt. 28-06-2017

Exemption from IGST supplies by CSD to Unit Run Canteens and supplies by CSD / Unit Run Canteens to authorised customers under section 6 (1)

06/2017-Integrated Tax (Rate),dt. 28-06-2017

Notification prescribing refund of 50% of IGST on supplies to CSD under section 20

05/2017-Integrated Tax (Rate),dt. 28-06-2017

Supplies of goods in respect of which no refund of unutilised input tax credit shall be allowed

04/2017-Integrated Tax (Rate),dt. 28-06-2017

Reverse charge on certain specified supplies of goods under section 5 (3)

03/2017-Integrated Tax (Rate),dt. 28-06-2017

Integrated Goods and Services Tax Act, 2017 (13 of 2017), the Central Government, on the recommendations of the Council, hereby notifies the rate of the integrated tax.

02/2017-Integrated Tax (Rate),dt. 28-06-2017

Integrated Goods and Services Tax Act, 2017 (13 of 2017), the Central Government, on the recommendations of the Council, hereby notifies the rate of the integrated tax.

01/2017-Integrated Tax (Rate),dt. 28-06-2017

Integrated Goods and Services Tax Act, 2017 (13 of 2017), the Central Government, on the recommendations of the Council, hereby notifies the rate of the integrated tax.

Some of the important notifications related to Rates on Goods are attached for your reference.  For information on all above circulars, Please  use below link-
http://www.cbec.gov.in/htdocs-cbec/gst/integrated-tax-rate-2017

Members are requested  to take note of the same.

Thanking You,

Yours faithfully,
(S.G. BHARADI) 
Executive Director
CHEMEXCIL

Encl : Notification for IGST rate Schedule - 1
Notification for IGST exemption - 2
Schedule for Conditional IGST exemption - 3
Notification for reverse charge IGST - 4
Notification 8 - IGST
Notification for restriction of ITC IGST - 5

BACK

GST- 24×7 Helpdesk at JNCH for GST implementation

EPC/LIC/GST_JNCH 30th June 2017
 
TO ALL THE MEMBERS OF COUNCIL
 

GST- 24×7 Helpdesk at JNCH for GST implementation

Dear Members,

Kindly note that The Commissioner Of Customs (NS-1), JNCH has notified  that  a helpdesk for co-ordination and facilitation of Importers, Exporters, Customs Brokers and other trade members for roll out of GST in customs, is being constituted wef 01.07.2017 to 15.07.2017 or till further orders.

The contact details of JNCH Team Officers and Date wise Allocation of Work for the Teams  are available in the attached PN or can be accessed using below link-http://164.100.155.199/pdf/PN-2017/PN_NO_81.pdf

The helpdesk will provide 24x7 support to all concerned in regard to procedural or technical issues/problems/queries pertaining to GST in Customs. The email ID of GST Helpdesk is gsthelpdeskjnch@gmail.com

Further, the icegate helpdesk No.-1800-3010-1000, email ID- icegatehelpdesk@icegate.gov.in and team.ices@icegate.gov.in will also be available 24x7 for all concerned .

Members are requested to take note of above and in case of JNCH related  issues, may contact the 24x7 Helpdesk.

Thanking You,

Yours faithfully,
(S.G. BHARADI)
Executive Director
CHEMEXCIL

BACK

Preparation for Exports after GST Roll-out

EPC/LIC/GST_Enrolment_Reminder 29th June 2017
 
TO ALL THE MEMBERS OF COUNCIL
 

Preparation for Exports after GST Roll-out

Dear Members,

You are aware, GST will be rolled out from 1st July, 2017.

As a service to the members, the council has been disseminating circulars/ mailers having information as and when released on CBEC/ GST/ ICEGATE portals so that members can migrate to GST timely and also get familiar with new Rules, Formats, Rates, Returns etc which are published for usage under GST regime. We hope that you have already done the necessary preparations to meet the requirements of GST Regime.

However, we would like to highlight following points which you need to keep in mind:

Enrolment with GSTN

Please ensure that you have registered with GSTN and have obtained the 15 digit GSTIN which is mandatory for every exporter/importer irrespective of the threshold limit of exports. In case, you have not yet obtained GSTIN, please do so immediately as the window is open again since 25th June 2017 and shall remain so till 30/09/2017.
Mandatory Declaration of GSTIN in S/B & B/E

Declaration of valid GSTIN in Customs documents (BE/SB) would be mandatory to avail IGST credit on Imports or GST refund on exports. As per advisory of CBEC, for the time being exporters/importers may mentioned GSTIN, PAN & IEC for their export/ import shipments.

Treatment of Exports under GST (Zero Rated Supply)

As per the provisions of IGST law (Section 16), export of goods and/or services are to be treated as "zero rated supplies" and a registered taxable person exporting goods or services shall be eligible to claim refund under one of the following two options u/s 16(iii):

Export under bond or letter of undertaking without payment of Integrated Tax and claim refund of unutilized input tax credit.

Export on payment of Integrated Tax and claim refund of the tax so paid on goods and services exported. The aforesaid refunds will be subject to rules, safeguards and procedures as may be prescribed.

The application for refund for zero rated supplies can be filed after the export manifest or an export report or Relevant date based on mode of transportation (as per refund rules).

Important Documents (Invoice and Shipping Bills)

Invoice & shipping bills (the two important documents) should be filed as prescribed by the authorities.

New Shipping Bills: The new format of Shipping Bill has been issued by CBEC and mailed by us to the members. The same is also available on our website as well as ICEGATE/ CBEC portals.

https://www.icegate.gov.in/Download/ICES_1.5_CHA_Customs_Exports_Mesg_Format_Ver_2.0_27June2017.pdf

Invoice:

There is no specific format of invoice prescribed for exports. However, as per attached invoice rules it is important that certain information is provided in the invoice so as to get refund of tax paid on goods or unutilized input tax credit. Please ensure that the following information are available in the invoice:-

name, address and GSTIN of the exporter;

a consecutive serial number, in one or multiple series, containing alphabets or numerals or special characters hyphen or dash and slash symbolised as "-" and "/" respectively, and any combination thereof, unique for a financial year;

date of its issue;

HSN code of goods or Accounting Code of services; description of goods or services;

quantity in case of goods and unit or Unique Quantity Code thereof;

total value of supply of goods or services or both;

rate of tax (integrated tax);

amount of tax charged in respect of taxable goods or services (integrated tax);

place of supply along with the name of State;

signature or digital signature of the supplier or his authorized representative;

The invoice shall carry an endorsement "SUPPLY MEANT FOR EXPORT ON PAYMENT OF IGST" or "SUPPLY MEANT FOR EXPORT UNDER BOND OR LETTER OF UNDERTAKING WITHOUT PAYMENT OF IGST", as the case may be, and shall contain the following details:

i. name and address of the recipient;
ii. address of delivery;
iii. name of the country of destination; and
iv. number and date of application for removal of goods for export

DGFT related FAQ's:

Please refer to FAQ's issued by DGFT related to the schemes under FTP 2015-20 which are available on http://dgftcom.nic.in/exim/2000/DGFT-GST-FAQ.pdf . For further queries on FTP related schemes you may also contact your DGFT RA or write to gstcell-dgft@gov.in

Important Resources on GST:

CBEC has issued various fliers/ advisories on GST for the benefit of trade which we have been informing you. For further info, please click- http://www.cbec.gov.in/htdocs-cbec/gst/index Important Contacts

For any issues faced in new formats or other GST IT related matters etc, please contact following under CC to the Council:

CBECMITRA HELPDESK
Toll free Helpline:1800-1200-232
Email: cbecmitra.helpdesk@icegate.gov.in

GSTN HELPDESK
Helpline: 0124-4688999
Email: helpdesk@gst.gov.in

Members are requested to take note of all above and do the needful for exports/ imports under GST regime w.e.f 1st July 2017. In case of any persistent issues / difficulty or our assistance, you can write to us on ed@chemexcil.gov.in & Deepak.gupta@chemexcil.gov.in

Thanking You,

Yours faithfully,
(S.G. BHARADI)
Executive Director
CHEMEXCIL

BACK

Reminder - GST Enrolment available again from 25th June 2017

EPC/LIC/GST_Enrolment_Reminder 28th June 2017
 
TO ALL THE MEMBERS OF COUNCIL
 

Reminder - GST Enrolment available again from 25th June 2017

Dear Members,

This is in continuation of our earlier mailers / reminders for GST Enrolment  as and when the registration window is available.  We hope our members  have already enrolled with GSTIN and some of the members  have also confirmed GST details to us.

Kindly note that in case any member has still not enrolled, they can still enrol for GST,  as enrolment window  has  re-opened at GST Portal (www.gst.gov.in) from 25 June 2017 and will remain open till 30 Sept. 2017 (i.e. beyond 1 July 2107), to give another opportunity to remaining taxpayers.

Member-exporters who have already done the needful, but have not confirmed to us  are once again requested to confirm their GST details to the council on balani.lic@chemexcil.gov.in  & Deepak.gupta@chemexcil.gov.in  immediately.

Thanking You,

Yours faithfully,
(S.G. BHARADI)
Executive Director
CHEMEXCIL

BACK

CBEC Advisory for Taxpayers reg. GST Migration

EPC/LIC/GST_Migration 28th June 2017
 
TO ALL THE MEMBERS OF COUNCIL
 

CBEC Advisory for Taxpayers reg. GST Migration

Dear Members,

In view of re-opening of GST Common Portal for enrolment  from 25 June 2017, Central Board of Excise & Customs (CBEC) issued an advisory containing  following FAQs on certain common issues being faced by Taxpayers during the migration process:


CBEC Advisory for Taxpayers reg. GST Migration FAQs

Migration Issue/ FAQs

 

 

CBEC Advisory/ Comments

 

Provisional Id (PID) is awaited

Assessees needs to send a request to cbecmitra.helpdesk@icegate.gov.in and mention CE/ST registration number, PAN number, legal name as on PAN, trade name of assessee, state. DG Systems will compile the list and send to GSTN for issuance of PID. The Provisional IDs would be distributed among assesses only after being provided by GSTN to DG Systems, CBEC.

RC cancelled

Assessee needs to send a request to cbecmitra.helpdesk@icegate.gov.in to reactivate the cancelled Provisional ID and mention the old Provisional ID issued earlier.

Centralised registrations: Provisional ID has not been issued for all the states

PID will be issued to all addresses mentioned in Registration Certificate of ST. If all the premises are not mentioned in the ST2/RC, then RC needs to be amended to include all these premises. Assesse need to apply for fresh GST registration on www.gst.gov.in after appointed date for those states which addresses are not added in RC. Same goes for new premises that would be set up anywhere else.

Unable to submit enrolment form with Digital Signature

Even if the Assesse is unable to submit the form, they may only complete the form and save it on www.gst.gov.in. ARN number of saved forms will be emailed to them after 15th June 2017 subject to validation of information supplied on GST common portal.

Provisional Id issued against wrong state / assessees amended the state after the issuance of provisional Id

Assesse needs to write to cbecmitra.helpdesk@icegate.gov.in mentioning the state for which PID is required and mention CE/ST registration number, provisional ID, PAN number, legal name as on PAN, trade name of assesse, state. DG Systems will compile the list and send to GSTN for issuing new ID. The ID issued for the old state would be CANCELLED.

Provisional Id issued against a different registration number (e.g. PID issued against AAAAA1234MST001 which is not in use instead of AAAAA1234MST002 which is used by assessee)

Assesse needs to check his jurisdiction for the registration number against which the PID is issued on www.easiestcbec.gov.in (assessees code based search). Then apply to the concerned Range Superintendent to reset the password for the registration. Then access the old registration number and obtain the PID and password.
Alternately, the Assessee may obtain the PID and Password from the concerned jurisdictional officer as same has also been shared with them through the Zonal Chief Commissioner Office.
The Assessee then has to mention all his registered premises as additional premises in the enrollment form.

Provisional Id activated by assessee but not completed migration by filling up enrollment form.

Assessee needs to complete the enrollment by completely filling up enrollment form and save it on www.gst.gov.in. ARN number of saved forms will be emailed to them after 15th June 2017 subject to validation of information supplied on GST common portal.

'No record found' when searched by RC/ ST2 number on www.gst.gov.in under link "check registration status"

Search using PAN instead of registration number. Still, if the result is not found, please write to cbecmitra.helpdesk@icegate.gov.in with all details such as registration number, PAN number, legal name as on PAN, business name, state for generation of PID.

Provisional Id is already mapped against a different user.

Complaints need to be registered with GSTN help desk on 0124-4688999 or helpdesk@gst.gov.in

Member-exporters are requested to  take note of the same and  if  you are facing any of the above issues in migration, please undertake steps mentioned in above advisory.

Thanking You,

Yours faithfully,
(S.G. BHARADI)
Executive Director
CHEMEXCIL

BACK

New Shipping Bills and Bill of Entry formats for Exporters / Importers

EPC/LIC/GST_Enrolment_Reminder 28th June 2017
 
TO ALL THE MEMBERS OF COUNCIL
 

New Shipping Bills and Bill of Entry formats for Exporters / Importers

Dear Members,

Kindly note that the  new Shipping Bills   & Bills of Entry Formats are uploaded on CBEC   & ICEGATE portals  for use of Exporters/ Importers  etc.

Hopefully, your CHA/ service  providers might have informed you already about  the new B/E & S/B's forms and shall also do the  needful as  per advisory issued by Member (Customs) which is available on the below link- http://www.cbec.gov.in/resources//htdocs-cbec/deptt_offcr/doltr-membr-cs-gst-
advisory-revision3.pdf


Member exporters are any case requested to take note and also get familiar with the modified formats of S/B and B/ E.

Thanking You,

Yours faithfully,

(S.G. BHARADI)
Executive Director
CHEMEXCIL

Encl : http://chemexcil.in/uploads/files/ICES_1.5_BE_Tech_Doc_2_.2_21_.06_.2017_.pdf

http://chemexcil.in/uploads/files/ICES_1.5_CHA_Customs_Exports_Mesg_Format_
Ver_2_.0_27June2017_.pdf

BACK

Contact Details of O/o GST Council and Sectoral Groups

EPC/LIC/GST 27th June 2017
 
TO ALL THE MEMBERS OF COUNCIL
 

Contact Details of O/o GST Council and Sectoral Groups

Dear Members,

Kindly note that as per CBEC website,  the relevant contact details pertaining to GST Council & sectoral groups are as follows:

GST Council Contacts

Please use below link-
http://www.cbec.gov.in/resources//htdocscbec/gst/GST%20Council%
20address%20and%20contacts.PDF


Sectoral Groups on GST

The sector wise working group contact details of Central/ State officers are available on below link-

http://www.cbec.gov.in/resources//htdocs-cbec/gst/sectoral-working-gp-contactdtls-14june2017.pdf

Further, the dedicated Website of GST council is -   http://gstcouncil.gov.in/

Members are requested to take note of the same.

Thanking You,

Yours faithfully,
(S.G. BHARADI)
Executive Director
CHEMEXCIL

Encl :GST Council address & contacts
Sectoral working gp contacts

BACK

Relaxation in return filing procedure for first two months of GST

EPC/LIC/GST_RETURNS 19th June 2017
 
TO ALL THE MEMBERS OF COUNCIL
 

Relaxation in return filing procedure for first two months of GST

Dear Members,

Pursuant to GST Council meeting on 18th June 2017, a press note is issued by the Ministry regarding filling of returns.

To ensure smooth rollout of GST and address the concerns expressed by the trade and industry regarding filing of the returns in GST regime, it has been decided that, for the first two months of GST implementation, the tax would be payable based on a simple return (Form GSTR-3B) containing summary of outward and inward supplies which will be submitted before 20th of the succeeding month.

As per  relaxed timetable for filing returns, the assesses could file their detailed invoice-based returns by September 5th  for July. Similarly, for August, these returns could be filed by September 20th.

For further details, members can download the press note by using below link-
http://www.cbec.gov.in/resources//htdocs-cbec/press-release/press-note-on-return-filing.pdf

Members are requested to take note of the same.

Thanking You,

Yours faithfully,
(S.G. BHARADI)
Executive Director
CHEMEXCIL
Encl : Press Note

BACK

DGFT Related GST FAQs

EPC/LIC/GST_DGFT_FAQ's 16th June 2017
 
TO ALL THE MEMBERS OF COUNCIL
 

DGFT Related GST FAQs

Dear Members,

We would like to inform you that  O/o DGFT has issued "DGFT related GST FAQs" to clarify your  queries, if any,  regarding export promotion schemes  under GST Framework.

The document having DGFT related GST FAQ's is attached herewith for your information.  The same can also be downloaded using below

http://dgftcom.nic.in/exim/2000/DGFT-GST-FAQ.pdf

Members are requested to  take note of the same  and for further clarifications, may contact  following  in DGFT:

GST Help Desk (DGFT HQ, New Delhi)

Telephone No-  011-23063080

E-Mail id:  gstcell-dgft@gov.in

 GST Help Desk  (Additional DGFT Office, Mumbai):

Name of an officer

Designation

email

Contact no

Shri K.M. Harilal

Dy. DGFT

km.harilal@nic.in

022-22001247

Shri. P.S. Kamble

Asst. DGFT

ps.kamble@nic.in

022-22017716 – Ext. 103

Members located in other regions may also contact their local DGFT RA's for any queries or may write to us.

Thanking You,

Yours faithfully,
(S.G. BHARADI)
Executive Director
CHEMEXCIL

Encl : DGFT GST FAQ

BACK

GST Help Desk at DGFT HQ- Contact Details

EPC/LIC/GST_DGFT 15th June 2017
 
TO ALL THE MEMBERS OF COUNCIL
 

GST Help Desk at DGFT HQ- Contact Details

Dear Members,

This is in continuation of our mailer dated 9th June 2017 regarding constitution of  "GST Facilitation Cell" in Office of DGFT Headquarters and all DGFT RA's  to serve as the first point of contact for addressing any issues regarding GST in respect of the Foreign Trade Policy.

In this regard, O/o DGFT has now  issued Trade Notice no. 10/18 dated  14/06/2017  providing  following contact details of  GST Help Desk in DGFT Headquarters:

The DGFT HQ GST Help Desk Phone No-  011-23063080

E-Mail id:  gstcell-dgft@gov.in

Members are requested to kindly take note of the same and can contact above for addressing any issues regarding GST in respect of the Foreign Trade Policy.

Thanking You,

Yours faithfully,
(S.G. BHARADI)
Executive Director
CHEMEXCIL

Trade Notice No. 10(1) (GST Help Desk in DGFT)

 

BACK

Anti-dumping Investigation by China on Meta Phenoxy Benzaldehyde (MPBD) Imported from India

EPC/LIC/ADD/MPBD 14th June 2017
 
TO ALL THE MEMBERS OF COUNCIL
 

Anti-dumping Investigation by China on Meta Phenoxy Benzaldehyde (MPBD) Imported from India

Dear Members,

We have received intimation from Directorate General of Anti-Dumping (DGAD) that an Anti-Dumping Investigation has been  initiated by Chinese Ministry of Commerce (MOFCOM)  on the import of Pheonoxy benzaldehyde (MPBD) originating in India.

This announcement  made by  MOFCOM on June 8, 2017  to launch the anti-dumping investigation is available on below link of MOFCOM:
http://english.mofcom.gov.cn/article/newsrelease/
significantnews/201706/20170602592308.shtml

The investigation details are as under-

Product:   Meta Phenoxy Benzaldehyde, M-Phenoxy Benzaldehyde and 3-Phenoxy Benzaldehyde, abbreviated as MPB or MPBD.

HS Code:      It is listed under the Customs Import and Export Tariff of the People's Republic of China and the tariff number is 29124990.

The investigation should be concluded before June 8, 2018, and could be prolonged to December 8, 2018 in particular cases.

Please also find attached below documents received from DGAD:

A copy of the application for anti-dumping investigation submitted by the domestic industry in China (in Chinese).

Questionnaire to be filled by Indian Manufacturers/ Exporters of  Pheonoxy Benzaldehyde
 (in Chinese).

The English version of the documents are still awaited from DGAD/ Indian Embassy, Beijing and shall be forwarded to the interested companies once received by us.

Member exporters who are exporting above product to China might have also received this communication directly from MOFCOM.  In case you are participating in the investigation, kindly do the needful submissions as per the guidelines/ timelines and also confirm to us on  e-mail id's- Deepak.gupta@chemexcil.gov.in and balani.lic@chemexcil.gov.in .

In case you need any support from the council  in this regard, please  do let us know.

Thanking You,

Yours faithfully,
S.G. BHARADI
EXECUTIVE DIRECTOR
CHEMEXCIL
Encl: As above.
http://chemexcil.in/uploads/files/20170608084118304.pdfhttp://chemexcil.in/uploads/files/20170608084118174_(3).pdfhttp://chemexcil.in/uploads/files/20170608084118586.pdf

 

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Imp- Changes in IEC with the introduction of GST

EPC/LIC/IEC_GST 13th June 2017
 
TO ALL THE MEMBERS OF COUNCIL
 

Imp- Changes in IEC with the introduction of GST

Dear Members,

We draw your attention to an important Trade Notice No.09/2018 dated 12th June 2017  issued by DGFT regarding changes in IEC with the introduction of GST.

As you are aware, as per Foreign Trade Policy (Para 2.05),   Import Export Code (IEC) a 10 digit number, is mandatory for undertaking any import export activities. As on date PAN has one to one correlation with IEC.

However, with the implementation of the GST w.e.f. (the notified date), GSTIN would be used for purposes of (i) credit flow of IGST on import of goods, and (ii) refund or rebate of IGST related to export of goods.Registration No. under GST, called GSTIN, is a 15-digit alpha numeric code with PAN prefixed by State Code and suffixed by 3 digit details of business verticals of the PAN holder. As GSTIN will be used for the purposes mentioned above, it thereby assumes importance as identifier at the transaction level. In view of this, it has been decided that importer/exporter would need to declare only GSTIN (wherever registered with GSTN) at the time of import and export of goods. The PAN level aggregation of data would automatically happen in the system.

Since obtaining GSTIN is not compulsory for all importers/exporters below a threshold limit of turnover, all exporters/importers may not register with GSTIN [barring compulsory registration in certain cases as provided in section 24 of the Central Goods and Services Tax Act, 2017 (12 of 2017) or in cases where either credit is claimed of IGSTI, therefore, GSTIN cannot become universal, as IEC is for import/export business. Further, DGFT recognizes only the corporate entity (single identity) and not individual transactions.

As a measure of ease of doing business, it has been decided to keep the identity of an entity uniform across the Ministries/Departments. Henceforth (with the implementation of GST), PAN of an entity will be used for the purpose of IEC, i.e., IEC will be issued by DGFT with the difference that it will be alpha numeric (instead of 10 digit numeric at present) and will be same as PAN of an entity. For new applicants, w.e.f. the notified date, application for IEC will be made to DGFT and applicant's PAN will be authorized as IEC.

Further, for the existing IEC holders, necessary changes in the system are being carried out by DGFT so that their PAN becomes their IEC. DGFT system will undertake this migration and the existing IEC holders are not required to undertake any additional exercise in this regard. IEC holders are required to quote their PAN (in place of existing IEC) in all their future documentation, w.e.f. the notified date. The legacy data which is based on IEC would be converted into PAN based in due course of time.

Members are requested to take note of the same.  For downloading the above said TN, you may use below link-
http://dgft.gov.in/Exim/2000/TN/TN17/TN0918.pdf

Thanking You,

Yours faithfully,
(S.G. BHARADI)
Executive Director
CHEMEXCIL

 

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Constitution of GST Facilitation Cell in DGFT

EPC/LIC/GST 9th June 2017
 
TO ALL THE MEMBERS OF COUNCIL
 

Constitution of GST Facilitation Cell in DGFT

Dear Members,

As you are aware, GST is expected to roll-out from 1st July 2017.   To ensure smooth and successful  transition,  O/o DGFT has decided to constitute a "GST Facilitation Cell" in Office of DGFT Headquarters and all DGFT RA's  to serve as the first point of contact for addressing any issues regarding GST in respect of the Foreign Trade Policy.

"GST Facilitation Cell" DGFT is headed by Shri Nikunj Srivastava, Addl. DGFT (email: nikunj.srivastava@nic.in) and Shri Rakesh Kumar, Joint DGFT (email: r.kumar73@nic.in) and Shri Kaushlendra Pratap Singh, Dy. DGFT (email: kaushlendrap.singh@nic.in) as member of the Cell.

On the similar lines, all DGFT RA's  have been advised to constitute a similar 'GST Facilitation Cell' for addressing GST related issues in respect of Foreign Trade Policy.

Members are requested to kindly take note of the same, which has been notified vide Trade Notice No: 08/2018 dated 8th June 2017.

Thanking You,

Yours faithfully,
(S.G. BHARADI)
Executive Director
CHEMEXCIL

 

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Confirmation of GST Enrolment

EPC/LIC/GST_Enrolment 12th June 2017
 
TO ALL THE MEMBERS OF COUNCIL
 

Confirmation of GST Enrolment

Dear Members,

We have received communication from the Deputy Secretary, EP-CAP, Department of Commerce, GOI  regarding confirmation of GST Enrolment done by the members within the deadline before the roll-out.

In case you have already enrolled for GST, please  confirm on our email id's Deepak.gupta@chemexcil.gov.in and balani.lic@chemexcil.gov.in.

Otherwise, member-exporters who have not registered/ enrolled till date are advised to enrol with  GST portal at the earliest (by 15th June 2017) to avoid any  inconvenience  later on.

For the sake of convenience of the tax- payers, CBEC has issued following  for easy understanding of enrolment process:

Ø Self-help  Video on GST migration available on YouTube Channel:

This video can be accessed by clicking on  below link-
https://youtu.be/KuMKl3dKJG8

Ø Step by Step Guide for GST Enrolment for existing Central Excise / Service Tax Assesses

You may also refer to the  attached guide for enrolment with GST which has screen shots of pages which you will come through on ACES and GSTN Portal.

In case of any difficulty or query,  you can write to us or please contact your jurisdictional Central Excise/ Service Tax officers or call the following helpdesk numbers:

CBEC : 1800-1200-232.
GSTN: 0124 – 4688999
E-mail at cbecmitra.helpdesk@icegate.gov.in

Member-exporters who are yet to enrol  with GSTN,   are requested  to take note of the same and do the needful by the deadline of 15th June 2017.

A line of confirmation will be highly appreciated.

Thanking You,

Yours faithfully,
(S.G. BHARADI)
Executive Director
CHEMEXCIL

Encl : User guide

 

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GST: Final Transition Rules/ Approved Formats

EPC/LIC/GST 7th June 2017
 
TO ALL THE MEMBERS OF COUNCIL
 

GST: Final Transition Rules/ Approved Formats

Dear Members,

Kindly note that   as per updates on the Central Board of Excise and Customs (CBEC)  website, Final  Transition Rules have been amended and final Transition Rules and related formats as approved by GST Council have been uploaded on CBEC website.

The Final Rules/ Approved Formats  are for following:

Composition - Rules and Formats

Valuation Rules

ITC - Rules and Formats

Invoice, Debit & Credit Notes - Rules

Payment - Rules and Formats

Refund - Rules and Formats

Registration - Rules and Formats

Return- Rules and GSTP Formats, Mismatch Formats, Return Formats

Transition Rules - Rules and Formats

Proposed CTD Document

For further information, members may download the above using below  link on CBEC website-
http://www.cbec.gov.in/htdocs-cbec/gst/index

Members are requested  to take note of the same.

Thanking You,

Yours faithfully,
(S.G. BHARADI)
Executive Director
CHEMEXCIL

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Reminder - GST Enrolment by 15th June 2017/ Video Tutorials & Step by Step guide for GST Enrolment

EPC/LIC/GST_Enrolment 6th June 2017
 
TO ALL THE MEMBERS OF COUNCIL
 

Reminder - GST Enrolment by 15th June 2017/ Video Tutorials & Step by Step guide for GST Enrolment

Dear Members,

This is in continuation of our earlier mailers informing members about  GST Enrolment and also mandatory  requirement GSTN ID in S/B's and B/E from 1st July 2017 which is the likely date of Goods & Services Tax (GST)  roll-out .

To facilitate Enrolment of existing tax payers with GSTN portal, Government has once again opened GST enrolment window for 15 days starting   from 1st June 2017 till 15th June 2017.

Member-exporters who have not registered/ enrolled till date are advised to enrol with  GST portal at the earliest (by 15th June 2017) to avoid any  inconvenience  later on.

For the sake of convenience of the tax- payers, CBEC has issued following  for easy understanding of enrolment process:

Self-help  Video on GST migration available on YouTube Channel:

This video can be accessed by clicking on  below link-https://youtu.be/KuMKl3dKJG8

Step by Step Guide for GST Enrolment for existing Central Excise / Service Tax Assesses

You may also refer to the  attached guide for enrolment with GST which has screen shots of pages which you will come through on ACES and GSTN Portal.

In  a nutshell, members  need to have a provisional ID and password. These details one can obtain by logging into ACES portal (www.aces.gov.in). Members  are required to use the provisional ID and password to log into GSTN portal  (www.gst.gov.in) to fill up the required details, submit Form 20 and upload the supporting documents.  After providing the requisite details, an ARN (Application Reference Number) would be communicated by GSTN. Once you have the ARN, one would migrate to GST on the scheduled GST roll out date with issue of Provisional Certificate.

In case of any difficulty or query, please contact your jurisdictional Central Excise/ Service Tax officers or call the following helpdesk numbers:

CBEC : 1800-1200-232.
GSTN: 0124 – 4688999
E-mail at cbecmitra.helpdesk@icegate.gov.in

Member-exporters who are yet to enrol  with GSTN,   are requested  to take note of the same and do the needful by the deadline of 15th June 2017.

Thanking You,

Yours faithfully,
(S.G. BHARADI)
Executive Director
CHEMEXCIL

Encl : http://chemexcil.in/uploads/files/user-guide-for-migration.pdf

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GST- Addendum to GST Rate Schedule/ IGST Exemption List

EPC/LIC/ GST 5th June 2017
 
TO ALL THE MEMBERS OF COUNCIL
 

GST- Addendum to GST Rate Schedule/ IGST Exemption List

Dear Members,

This is in continuation of our mailer dated 22nd May 2017 with  Chapter-wise rate-wise GST Schedule decided in the GST Council Meeting held on 18.05.2017.

CBEC has now issued   Addendum to the GST Rate Schedule – dated 03.06.2017  &  IGST Exemption, Concession List -  dated 03.06.2017  etc (copy attached).

Members are requested  to take note of the same.

Thanking You,

Yours faithfully,
(S.G. BHARADI)
Executive Director
CHEMEXCIL

http://chemexcil.in/uploads/files/addendum-gst-rate-schedule-03.06_.2017_.pdfhttp://chemexcil.in/uploads/files/igst-exemption-concession-list-03.06_.2017_(1)_.pdf

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News & Articles

Govt to review export target in trade policy rejig

India is set to prune its ambitious export target of $900 bn as Narendra Modi's govt works on reviewing the foreign trade policy amid continued global weakness, uncertainty

The govt unveiled its 1st foreign trade policy for 2015-2020 in April, setting a merchandise, services export target of $900 bn by 2020, almost double the $465.9 billion achieved in 2013-14. Photo: Mint

New Delhi: India is set to prune its ambitious export target of $900 billion as Prime Minister Narendra Modi's government works on reviewing the foreign trade policy amid continued global weakness and uncertainty.

The reassessment comes as India slogs it out in negotiations for a regional trade deal that would account for almost 30% of global GDP and over a quarter of world exports, involving with China, the 10 Asean nations, Australia, New Zealand, South Korea and Japan, known as the Regional Comprehensive Economic Partnership.

The government unveiled its first foreign trade policy for 2015-2020 in April, setting a merchandise and services export target of $900 billion by 2020, almost double the $465.9 billion achieved in 2013-14. However, with the fragile global economic recovery and increasing protectionist economic policies, India is re-assessing the exports situation.

"We will review the target," commerce secretary Rita Teaotia told Bloomberg News in an interview on 30 May. "When we fixed the target, the global situation was different and it looked achievable. Since then there has been a great deal of change. There was economic slowdown, a fall in oil and other commodity prices."

India's export market has been sliding since 2014-15 when it contracted by 1.29% and further dipped 15.85% in 2015-16 from a growth of 4.66% in 2013-14, according to data from the ministry of commerce website.

Global slowdown

The exports have been adversely impacted by a global slowdown, a sharp fall in commodity prices and currency fluctuations, Teaotia said. "Prices of crude and petroleum products, which are very important commodities in both exports and imports basket, made a large dent in our trade numbers". Crude prices have declined 54% since June 2014.

In financial year ending March, merchandise exports registered a growth of 4.7% at $274.6 billion, up from $262 billion a year before, government data show.

The Federation of Indian Export Organisations — a body set up by the commerce ministry — estimates that to achieve the $900 billion target exports will have to grow at compounded annual growth rate of 28%, a tall order under the current global scenario.

"This growth rate is very high," director general of Fieo, Ajay Sahai, said by phone. "On a 15% growth rate, we will achieve $725-$750 billion by 2020."

Global trade continues to remain subdued, he said, and with softening of crude and commodity prices the majority of the nations have "lesser appetite for imports".

Foreign trade

The revised merchandise and services export target will be detailed in the mid-term foreign trade policy review scheduled before the roll out of a new nationwide sales tax from July 1. "It will be pragmatic that the government does course correction," Sahai said. "Global conditions are not as conducive as we initially thought".

Trade is a top priority for India. The Modi government has described infrastructure bottlenecks, high transaction costs and manufacturing constraints as the biggest domestic challenge for the exports. With the implementation of goods and services tax, however, India will become a unified market subsuming more than a dozen federal and provincial levies in a bid to free up trade.

"Theoretically GST should be better for exports due to better capturing of input tax credit. Foreign trade policy review will take into account all aspects," Teaotia said.

The commerce ministry is aligning the trade policy review with the roll out of GST. Currently, exporters are allowed duty-free import of materials that go into manufacturing products for exports. However under the new tax regime, exporters will have to pay the duty upfront and later claim refund.

Export growth

Global trade is expected to expand 2.4 percent in 2017, up from 1.3 % in 2016, according to the World Trade Organisation. Exports contribute over 20% to the GDP of Asia's third-largest economy.

"If exports grow by 15% they add about 3% to the GDP. India's growth can easily go in double digit if exports grow," Sahai of Fieo said. "For every $50 billion exports, one million jobs are created in the country." Bloomberg (Source: http://www.livemint.com/Politics/WRiSuFRs9nW0XDAs6PKVwK/Govt-to-review-export-target-in-trade-policy-rejig.html dated 2nd June 2017)

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PM Modi goes to Europe to initiate a new season of bilaterals

Prime Minister Narendra Modi and Russian President Vladimir Putin react while walking near the Constantine Palace during their meeting in St. Petersburg, Russia, on Thursday. REUTERS

The thing with the European Union (EU) is its mini-bus load of 27members. This after not counting the one that recently got off, but is yet to complete its divorce negotiations. An outsider might be forgiven, given the names of some of them, for thinking there are just too many freeloaders at the buffet table.

Doing a deal with Germany or France, who drive the bus at their own risk, and a disproportionate, some would say unsupportable, share of the cost, means you just did a deal with Malta as well. Negotiations with Brussels, however, are ponderous and reminiscent of the once-upon-a-time Concert of Europe.

So it is significant that Prime Minister Narendra Modi chose to visit the three top economies in the EU, on a bilateral basis, while missing out Brussels, which is the seat of the EU government of 27 nations.

But Modi took care in Germany to plump for European unity going forward, partly because it may be what his hostess wants to hear and partly because a united EU offers a single market for India. At least for now.

But being told what to do by Brussels, without concomitant benefit to British interests, may have been the very thing that prompted Brexit. Though the officiousness of EU's Brussels HQ, located in tiny Belgium, allegedly also played its part. It wasn't just Agatha Christie's HerculePoirot, after all, who was often constrained to clarify, with all the dignity he could muster, that he was Belgian, and not French.

Prime Minister Narendra Modi was undoubtedly looking for one-on-one gains during his calls on Berlin, Madrid and Paris, between 29 May and 3 June, with a visit to Russia in between, starting 31 May. So is the Chinese Prime Minister, from Germany's numerouno trading partner, compared to India's 24th slot - nevertheless following hot on his heels.

Modi thinks the time is opportune for this European visit, given the financial strains being experienced by the EU, where even Germany is growing at just 1.9% in GDP. He is probably willing to trade on aspects of the Free Trade Agreement (FTA) with the EU, stuck in limbo since 2013, if not the whole thing.

Both sides have been obdurate and self-focused, feeling justified to hold fast. But India may have the winning hand at this juncture.

This has prompted support for its NSG bid from Germany, mutual nods on fighting terrorism, and broad agreement on climate concerns, though short of formal acceptance from India on the last.

But even on bilateral investment agreements, there have been problems. A number of international arbitrations based on the recently expired one, have all gone against India. This suggests that perhaps it was not drafted to secure Indian interests all that well, in the first place.

Though negotiations on the EU's FTA are expected to resume in July, what Germany, the EU's biggest economy, really wants, is a new "Investment Protection Pact" for itself.

The old India-Germany Bilateral Investment Treaty expired in March after India gave a one-year notice, as stipulated, to end it. There are 600 joint ventures with Germany operating in India at present and hundreds more German companies that trade with it. But there is also the matter of the EU proclaiming, in 2012, that its individual members would not henceforth enter into bilateral investment treaties. But after Brexit, and existential threats to the EU's survival, there may have to be a rethink on the omnibus approach that favours, say, Latvia, more than it favours Germany.

India meanwhile, wants more of the mid-sized German engineering companies to form joint ventures in India. Though of long standing, India's trade with Germany is at a paltry euro 17.4 billion in 2016. This compares badly with Germany's euro 169.9 billion trade with China. And moreover, this is more or less evenly balanced.

Nevertheless, Germany is now uncomfortable with China's opaque One Belt One Road (OBOR) initiative. It does not indicate any road-map for the participation of other countries in the contracts for all its infrastructure development. India made clear that it wants new Make in India deals. Only, it wants them on a bilateral basis, in a "quantum leap" of "outcome-oriented" transactions. So, if Germany wants an Indian concession on multi-brand retail, India just might agree as it frees up its foreign direct investment (FDI) norms, but only in return for a clutch of strategic German engineering collaborations back-to-back.

At this time, as many as eight broad pacts were signed, but reciprocity will be the key to operationalising them going forward. Key amongst them were ones on "cyber politics" and "cooperation on digitalisation".

Meanwhile, President Donald Trump's no-holds-barred instruction to NATO to pay up its fair share of the costs, looking squarely at Germany at the time, may be adding urgency to the idea of expanding German presence in other markets. While Modi visited Germany last in 2015, making little headway beyond friendly atmospherics, this time changed circumstances could produce results.

Next, it was the first time an Indian Prime Minister visited Madrid in three decades. Here too, the most interesting pact signed was on "cyber security." Not only have cyber-attacks been responsible for abstracting millions from Indian banks, but they are suspected to have addled military assets like Army mortars. Most recently, a cyber-attack is thought to be responsible for bringing down a mechanically sound Sukhoi fighter in Northeast India, and its pilots, out on a routine sortie.

Spain, the EU's third biggest economy, has also inked pacts to cooperate in the fields of aerospace and defence with India.

Modi visited St Petersburg after Madrid in order to attend a Russia sponsored International Economic Forum, and tick the box of India's 18th annual bilateral summit with Russia. Modi is the guest of honour at this first of a kind Russian hosted economic summit. On India's part, there is a home delegation of 60 business leaders that are participating, with a special India pavilion at the venue. The key bilateral takeaway is expected to be a signing of contracts for the Kundakulam V and VI nuclear power reactors.

The whole gamut of bilateral relations between India and Russia, is also scheduled to be reviewed by President Putin and Prime Minister Modi, especially in a season of shifting alliances.

With several other mega military deals in the balance, including a state-of-the-art anti-ballistic missile shield system and several joint venture manufacturing projects, for helicopters, battle tanks, etc., Russia will be seeking to woo India.

In France, the EU's second placed economy, it is a first meeting between the newly elected Emmanuel Macron, a Centrist, following on from a Socialist Francois Hollande, and Narendra Modi.

Paris is already in the process of supplying the first 36 state-of-the-art Rafale fighters to India, even as a bigger contract to make hundreds more of the Rafales in India, is being negotiated. Macron has indicated a keenness to participate more vigorously in Modi's Make in India programme, with other military items to join the Rafale. This even as the French nuclear reactors on offer are found to be much too expensive.

While sections of the international and domestic media have characterised this quartet of visits as a "power push", the truth may be in being at the right places at the right time—even as outcomes are measured later.

America has signalled its unwillingness to prop up the European economy and its security going forward. How serious it is, cannot be immediately assessed. Still, there is something of a vacuum to be filled, and realignments to be made. (Source: http://www.sundayguardianlive.com/opinion/9643-pm-modi-goes-europe-initiate-new-season-bilaterals dated 3rd June 2017)

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PM Modi goes to Europe to initiate a new season of bilaterals

Commerce Ministry aims to better utilise resources in FTP formulation and trade negotiations

The Commerce Ministry has sought to shed from its portfolio non-core areas including Foreign Trade Policy (FTP) implementation, as well as administrative control over commodity boards and certain Public Sector Undertakings (PSU) such as MMTC, STC and PEC.

This is to better utilise the ministry's resources in 'core focus areas' such as FTP formulation as well as India's trade talks with other countries (bilateral and regional Free Trade Agreements) and at the World Trade Organisation (WTO)-level, according to official sources.

The Ministry's move to ensure greater attention to FTP formulation and trade talks assume significance as it comes at a time when India's goods and services exports are being impacted by rising incidents of protectionism across the world as well as trade disputes and weak global demand.

Export target

The apex body for India's exporters, FIEO, recently said the government's target for India's overall exports (goods and services) of $900 billion by 2019-20 is unlikely to be achieved and that it should be scaled down to $700-750 billion.

Negotiations on the WTO's Doha Development Round as well as India's proposed FTAs including the Regional Comprehensive Economic Partnership (mega-regional FTA between 16 Asia Pacific nations including India) and the one with the European Union are at a crucial stage.

The Commerce Ministry — in a recent inter-ministerial meeting convened by the Cabinet Secretariat — asked the Central Board of Excise and Customs (CBEC) to take over the role of the nodal body for FTP implementation, the sources said.

They added that the Commerce Ministry is also keen to transfer to the Agriculture and Farmer Welfare Ministry the administrative control it (Commerce Ministry) currently has over the commodity boards (Coffee Board, Tea Board, Rubber Board, Spices Board, and Tobacco Board) as well as the related responsibilities regarding the oversight of production, distribution and development of plantation crops (such as coffee, tea, rubber, spices, tobacco and cashew).

Core competence

The CBEC, however, is learnt to have declined the Commerce Ministry's request saying FTP was not its core competence, and that such as move may complicate matters as it (the CBEC) will have to create an operational structure similar to the one that the Directorate General of Foreign Trade (DGFT) currently has for FTP implementation.

The DGFT is attached to the Commerce Ministry and is responsible for formulating and implementing the FTP. The CBEC has also opined that shifting the FTP implementation powers from Commerce Ministry would also require the difficult process of amending the concerned laws — the Customs Act and the Foreign Trade (Development & Regulations) Act, the sources said.

On the issue of jurisdiction over plantations, the Commerce Ministry has begun work on a plan to merge the various commodity boards into a single organisation. (Source: http://www.thehindu.com/business/Industry/ministry-seeks-to-exit-non-core-areas/article18718570.ece 4th June 2017)

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India starts dumping probe on chemical from Korea, Taiwan

If established that dumping has caused material injury to domestic players, the DGAD would recommend imposition of duty on import of this chemical from these two countries to guard domestic industry against below-cost imports.

Plastic industry from Taiwan and Korea under probe following a complaint of dumping by domestic players.

India has started probe into a chemical used in plastic industry from Taiwan and Korea following a complaint of dumping by domestic players. The Directorate General of Anti-Dumping & Allied Duties (DGAD), the commerce ministry's investigation arm, has found "sufficient evidence" of dumping of "Dioctyl Phthalate" from Chinese Taipei (or Taiwan) and Korea. If established that dumping has caused material injury to domestic players, the DGAD would recommend imposition of duty on import of this chemical from these two countries to guard domestic industry against below-cost imports.

The authority has initiated "an investigation into the alleged dumping, and consequent injury to the domestic industry", DGAD has said in a notification. KLJ Plasticizers Ltd has filed the application for the dumping probe.

The output of the petitioner accounts for over 50 per cent of the Indian production, it said, adding that DGAD has fixed the period of investigation as April 2016 to March 2017 (12 months).

Anti-dumping duties are levied to provide a level playing field to local industry by guarding against below-cost imports. DGAD is also probing dumping of several other products such as certain chemicals from different countries.

India is one of the most attractive markets for global producers due to its large middle class population. Imposition of anti-dumping duty is permissible under the World Trade Organisation (WTO) regime.

The duty is aimed at ensuring fair trading practices and creating a level-playing field for domestic producers vis-a-vis foreign producers and exporters.

(Source: http://indianexpress.com/article/india/india-starts-dumping-probe-on-chemical-from-korea-taiwan-4689930/ dated 5th June 2017)

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GST: Exporters to get 90% duty refund within seven days

Under the GST regime, the remaining 10% duty refund will be made after verifications by tax authorities

The finance ministry has agreed to refund 90% of the duties paid by exporters in the process of manufacturing items for export within a period of seven days under the Goods and Services Tax (GST) regime.

The issue was raised at a meeting of state industry ministers under the Trade Promotion and Development Council, chaired by commerce and industry minister Nirmala Sitharaman.

Commerce secretary Rita Teaotia told the state ministers that the revenue department has given an assurance that the revamped ICEGATE portal would make sure refunds are made on time. "If duty refunds could not be made within seven days, then government will pay interest to exporters. However, it is yet to be decided how much interest will be paid to exporters in such a scenario," Teaotia said.

The ICEGATE portal provides e-filing services to trade and cargo carriers and other customs department clients.

The remaining 10% refund will be made after verifications by tax authorities.

The commerce secretary's assurance satisfied exporters and the states.

The proposed GST regime mandates that all duties must be paid at the time of the transaction, while refunds can be obtained after exports.

For exporters, this could mean a working capital crunch as duties may get held up with tax authorities for months before a refund is processed.

Two schemes are especially likely to be impacted by the GST regime: the Advance Authorization Scheme (AAS) that allows duty-free sourcing of raw material and the Export Promotion Capital Goods (EPCG) scheme that allows duty-free sourcing of machinery for export purposes.

"GST clearly provides that taxes must be paid and refunds will be provided. So since the regime is so structured, in order to ensure that there is minimum pain to exporters, duty refunds will be provided within a week's time," Teaotia said.

Teaotia said the states also raised the issue of duties to be paid on transferring goods between units in two states.

"This issue has been raised by the commerce ministry before the GST Council on 3 January and we are looking forward to a favourable consideration," she added.

The commerce ministry has sought exemption from inter-state GST on goods transferred from Special Economic Zones (SEZs) across states, arguing that since SEZs are treated as zones outside the country's territory, they should not pay duties on transactions among them.

Sitharaman said the commerce ministry has designed a new scheme called Trade Infrastructure for Exports Scheme (TIES) that will come into operation from the next financial year to support states to build export infrastructure.

The scheme, contours of which are still to be finalized, will replace the ASIDE (Assistance to States for Infrastructure Development of Exports) scheme that was discontinued by the centre in 2015-16, when states' share in net proceeds of union tax revenues was increased to 42% from 32%, in line with the 14th Finance Commission's recommendations.

However, the states are yet to agree to expediting refunds.

S.C. Ralhan, president, Federation of Indian Export Organizations, said exporters require the support of the states so that exports do not face the liquidity problems under GST.

"The Merchant Exporters, who at present avail exemptions through various forms, may be given the same facility under GST. We have many meetings with the Central Government but they feel it will be possible only if the States agree to the same as exports are subject to IGST which has both Central GST and State GST component. The exemption from IGST on the final product procured for exports would help in easing the liquidity as cost of credit in India is much above the international benchmark," he said.

(Source: http://www.livemint.com/Politics/3MdUOljN6ZzAuNet17AKUJ/GST-Exporters-to-get-90-of-duty-refund-within-seven-days.html?gclid=EAIaIQobChMI_uTTwMzQ1AIVQSRoCh1xJAznEAAYASAAEgIXbvD_BwE dated 6th June 2017)

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The art of the free trade agreement

During their recent meeting in Germany, Prime Minister Narendra Modi and German Chancellor Angela Merkel agreed on the need to resume India-European Union (EU) free trade agreement (FTA) talks. These negotiations, covering trade, investment protection and intellectual property, have remained deadlocked since 2013.

The recent and hasty unilateral termination of bilateral investment treaties (BITs) by India with many EU member countries including Germany has complicated things further, leaving many European businesses worried about investment protection in India. As India prepares to resume FTA negotiations on all issues including investment protection, a recent landmark decision by the European Court of Justice (ECJ) — the highest court in the EU in matters of EU law — which has not attracted much attention assumes importance.

The ISDS mechanism

The European Commission negotiated an FTA with Singapore from 2010 to 2013 covering a wide range of issues such as tariff reductions, intellectual property and investment protection including the investor-state dispute settlement (ISDS) mechanism. The ISDS provision in the EU-Singapore FTA gives investors a choice between bringing a dispute against a host state before the national court of the country where the investment has been made and submitting the dispute to international arbitration. The European Commission and the EU member states disagreed as to who had the competence to ratify the FTA. The ECJ decided that EU had the exclusive competence over almost all aspects of the FTA barring non-direct foreign investment — also known as portfolio investment — and the ISDS mechanism. In other words, for agreements containing non-direct foreign investment and/or ISDS provisions, EU member states enjoy mixed competence to approve such treaties. The court held that since the ISDS provision allowed the removal of the disputes from the jurisdiction of the courts of an EU member state, it could not be done without the consent of the member states.

This decision will impact the EU's ongoing FTA negotiations, including with India. As Anthea Roberts of the Australian National University has argued, to honour the ruling, the EU might consider different options. First, it could decide to jettison the ISDS clauses in all its future FTAs. In other words, it may negotiate FTAs where disputes between investors and states would be resolved using the state-state dispute settlement (SSDS) mechanism. Given India's protectionist stand on BITs and ISDS, as reflected in the 2016 Model BIT, India might be happy with this outcome. However, it is unlikely that the EU would totally abandon the ISDS system. Its FTA-text with Singapore and also the recently signed EU-Canada FTA reveals the EU's preference for ISDS. Though, one major change is that the EU, in its FTA with Canada, has moved away from arbitration to a bilateral investment court system to settle investor-state disputes. Under this system, both countries nominate a roster of 15 tribunal members for a five-year period, and three members shall be randomly selected to serve on one tribunal. In addition to this, an appellate tribunal will be established to review tribunal decisions. Not just this, the EU is also keen to set up a multilateral investment court (MIC) with an appellate mechanism as reflected in Article 8.29 of the EU-Canada FTA.

Second, the EU could negotiate an FTA with ISDS provisions subject to the treaty being approved by all EU member states. However, this option is not feasible because all EU member countries might not ratify such an FTA. Third, it could negotiate the main FTA without an ISDS provision but make ISDS provisions a subject matter of an optional protocol provided this is permitted under EU law. The optional protocol could theoretically bind the EU's partner country and only those EU member countries that ratify it and thus give their consent to the removal of investor-state disputes from their jurisdiction.

Challenges for India

Assuming the EU exercises the third option and tailors the ISDS optional protocol on the lines of the EU-Canada FTA, India will have to think about its ISDS negotiating strategy carefully on three fronts. First, will India accept allowing foreign investors to submit cases to international tribunals without first resorting to domestic courts? The 2016 Indian Model BIT requires a foreign investor to litigate in national courts for at least five years before approaching an international tribunal. Second, is India prepared to accept the proposal of setting up a MIC and submit to the jurisdiction of such a court? This would mean that all BIT disputes would be settled by the MIC and not through ad hoc arbitration as India currently proposes in its Model BIT. There is a lot of merit in developing an MIC because it will help fight the vices of current ISDS system based on ad hoc arbitration. The MIC system will bring in tenured-judges with expertise in international investment law (IIL) unlike the party-appointed arbitrators, many of whom are not experts in IIL; usher in transparency in the ISDS system; introduce an appellate mechanism to correct errors of law made by tribunals of first instance, which is missing in the current ISDS system. Third, pending the creation of the MIC, will India accept the creation of a bilateral investment court system with tribunal members being appointed for a five-year period and with an appellate mechanism? The method of dispute resolution in the Indian Model BIT is based on ad hoc arbitration through party-appointed arbitrators though the possibility of creating an appellate mechanism is recognised.

India should use the ECJ decision to rethink the best way of approaching the ISDS, such as whether it should move forward with the option of negotiating for a MIC. As a democracy based on the rule of law, India should actively engage with the EU as part of its FTA negotiations, towards creating a robust and transparent international judicial system like the MIC that would protect foreign investment from state's regulatory abuse.

(Source: http://www.thehindu.com/opinion/lead/india-eu-ties-the-art-of-the-free-trade-agreement/article18732229.ece 7th June-2017)

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The art of the free trade agreement

New Delhi: The Union Cabinet chaired by the Prime Minister Shri Narendra Modi has approved the proposed Memorandum of Understanding (MoU) between Export-Import Bank of India (EXIM Bank) and Export-Import Bank of Korea (KEXIM) for export credit of USD 9 billion for infrastructural development in India and for the supply of goods and services as part of projects in third countries.

The MoU is proposed to be signed between the two banks during the forthcoming visit of the Finance Minister Shri ArunJaitley, to Seoul, Korea during 14-15 June 2017 for the Annual Financial Bilateral Dialogue. The decision is expected to promote the country's international exports, and deepen political and financial ties between India and Korea. The export credit will be utilized through lending by EXIM Bank for promoting projects for priority sectors, including smart cities, railways, power generation and transmission etc., in India and for the supply of goods and services from India and Korea as part of projects in third countries.

Implementation Strategy

Under the implementation strategy, the parties to the MoU will hold mutual consultations to structure the financial assistance, review the existing arrangements and related procedures. EXIM Bank will identify viable projects in India. For projects in third countries, both parties will jointly identify viable projects. It is understood from EXIM Bank that the USD 9 billion would be extended by KEXIM by way of Investment Credit (typically export credit facility to finance projects with a certain level of Korean import content and interest rates as per OECD export credit guidelines). This amount may also be utilized by KEXIM as the financier without the participation of EXIM Bank subject to satisfaction of the purpose.

The supply of goods and services from India and Korea as part of projects in third countries will be an additional avenue which this MoU will enable. It will help in exchanging mutual experience, sharing information on financing export and import operations, project assessment and knowledge generated in respective fields of activities.

Background

The Joint Statement issued in 2015 during the visit of the Prime Minister to the Republic of Korea stated that Korea intends to offer USD 10 billion of infrastructural development in India. The package was subsequently prepared to comprise of USD 1 billion from the South Korean Economic Development Cooperation Fund (EDCF) as government to government funding and USD 9 billion as export credit from KEXIM. The credit of USD 9 billion from KEDIM is to be through a formal MoU to be signed between KEXIM and EXIM Bank.

(Source: https://www.ibef.org/news/cabinet-approves-mou-between-india-and-korea-for-export-credit-of-usd-
9-billion?utm_source=phplist740&utm_medium=email&utm_content=HTML&utm_campaign=India+News+Alert%25253A+Indian+media+and
+entertainment+industry+to+grow+at+a+CAGR+of+10.6+per+cent+between+2016-21%25253B+Since
+last+three+years%25252C+3.38+million+individual+household+toilets+and+128%25252C946
+community+toilet+seats+have+been+built
dated 8th June 2017)

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DGFT may come under Revenue dept.

Smooth movement: It is better if the entire trade facilitation work is brought under a single interface, the CBEC said.

The Centre is considering a proposal to shift the entire Directorate General of Foreign Trade (DGFT) office to the Department of Revenue (DoR) from the Department of Commerce (DoC) — as part of measures to simplify processes relating to export and import.

The suggestion — billed as a major trade facilitation measure and in line with the Centre's 'Ease of Doing Business' initiative — was mooted recently by the Central Board of Excise and Customs (CBEC) in the DoR within the Finance Ministry.

The DGFT's role includes Foreign Trade Policy (FTP) formulation and implementation — to in turn boost India's exports. It is manned mainly by the Indian Trade Service (ITS) cadre officials, but is usually headed by an Indian Administrative Service (IAS) officer.

IRS officials

If the proposal, that the CBEC put forward in a recent inter-ministerial meeting convened by the Cabinet Secretariat, is accepted, the DGFT will be placed within the DoR and staffed entirely by Indian Revenue Service (IRS) officials, official sources told The Hindu.

To enable an IRS official to head the DGFT, a new post — Principal/Chief Commissioner (Foreign Trade) equivalent to Additional Secretary to Government of India (the rank of the official currently heading the DGFT) — will be created, they added. The proposal will be taken up again soon, most probably in the first week of July.

This development follows the DoC recently seeking to hive off non-core areas including FTP implementation. This is to better utilise the DoC's resources (including ITS cadre officials) in 'core focus areas' such as FTP formulation as well as in India's trade negotiations. The DoC wanted to retain the DGFT as an office attached to it for FTP formulation.

The CBEC, however, is learnt to have said that it was getting several complaints from those in the foreign trade sector saying the current division of trade facilitation-related work between DoC and DoR was resulting in 'red tapism' and delays.

Trade facilitation

Therefore, to ensure greater ease of doing business, it will be better if the entire trade facilitation work is brought under a single interface, the CBEC said. India is currently ranked 130th out of 190 countries in the World Bank's (ease of) Doing Business report (2017) and further lower at 143rd when it comes to 'trading across borders'.

The shifting of DGFT office would require amendments in the concerned laws — the Foreign Trade (Development & Regulations) Act and the Customs Act. Another factor that could strengthen the CBEC's proposal is that it (CBEC) currently houses the Secretariat of the inter-ministerial National Committee on Trade Facilitation (NCTF), which was established in August 2016, consequent to India ratifying the WTO's Trade Facilitation Agreement (TFA) in April 2016.

The TFA has provisions to help ease flow of goods across borders. The pact has measures to ensure effective cooperation between customs and other concerned authorities on trade facilitation and customs compliance issues.

The NCTF is chaired by the Cabinet Secretary and comprises Secretaries of the departments concerned with trade issues including DoR and DoC. It also has the CBEC Chairman, the DGFT and Railway Board Chairman as Members.

(Source: http://www.thehindu.com/business/Economy/dgft-may-shift-from-commerce-ministry/article18864657.ece dated 8th June-2017)

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Commerce Ministry sets up GST facilitation cell

The commerce ministry today constituted a GST facilitation cell with a view to address issues regarding the new indirect tax regime in respect of foreign trade policy.

The cell is set up in the Directorate General of Foreign Trade (DGFT).

In a notice to all its regional offices, DGFT said: "to ensure smooth and successful roll out of Goods and Services Tax (GST), it is decided to constitute a GST facilitation cell".

The cell will be headed by Additional DGFT Nikunj Kumar Srivastava. It would have two Joint DGFT officials as members.

The regional authorities have also been advised to establish similar cells in their respective offices.

The GST would be rolled out from July 1. It will subsume a host of central and state taxes like excise duty, service tax and VAT.

(Source: http://www.moneycontrol.com/news/business/economy/commerce-ministry-sets-up-gst-facilitation-cell-2300511.html dated 8th June-2017)

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Commerce Ministry sets up GST Facilitation Cell

The Dollar Business Bureau

The Ministry of Commerce on Thursday constituted a Goods and Services Tax (GST) facilitation cell with the purpose to address issues related with the new tax regime with regards to the Foreign Trade Policy.

The facilitation cell is to be constituted in the Directorate General of Foreign Trade (DGFT) headquarter.

"To ensure smooth and successful rollout of GST, it is decided to constitute a 'GST Facilitation Cell' in DGFT Headquarter and all Regional offices of DGFT to serve as the first point of contact for addressing any issues regarding GST in respect of Foreign Trade Policy," the DGFT said in trade notice (No.08/2018) dated June 8.

Additional DGFT Nikunj Kumar Srivastava will head the GST facilitation cell. It would also have Rakesh Kumar, Joint DGFT and KaushlendraPratap Singh, Dy DGFT as its members.

The regional authorities are also advised to set up similar facilitation cells in their offices.

"On the same lines, all regional authorities have been advised to constitute a similar GST Facilitation Cell," the notice read.

The new GST regime is set to be rolled out from July 1. This new indirect tax regime will subsume a number of central and state levies such as service tax, excise duty, and VAT.

Last month, the GST Council had fixed the rates for more than 1,200 goods and 500 services under the tax brackets of 5%, 12%, 18% and 28%.

(Source: https://www.thedollarbusiness.com/news/comm-min-sets-up-gst-facilitation-cell-to-address-gst-related-issues/50491 dated 9th June-2017)

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Commerce Ministry engaging with stakeholders to resolve GST issues

It said that exporters can email their queries concerning GST and pertaining to foreign trade policy to the facilitation cell.

The commerce and industry ministry is organising consultations with all stakeholders, including exporters, to resolve their issues pertaining to the Goods and Services Tax (GST).

The Directorate General of Foreign Trade (DGFT), under the ministry, has constituted a GST facilitation cell to assist and advise exporters, trade and industry for a smooth transition from present regime to the GST.

"DGFT also convened a meeting of stakeholders to understand the issues being faced by them in GST system. These issues have been taken up with the department of revenue and GSTN," the commerce ministry said in a statement.

Most of the issues have been resolved by the department and GST Network, it added.

It said that exporters can email their queries concerning GST and pertaining to foreign trade policy to the facilitation cell.

"All regional offices of DGFT have also constituted GST facilitation cell and the cell would be headed by the head of the regional office," it said. The ministry has announced to align the mid-term review of foreign trade policy with the roll out of GST for the convenience of exporters and industry.

GST is scheduled to be rolled out from July 1.

(Source: http://www.moneycontrol.com/news/business/economy/commerce-ministry-engaging-with-stakeholders-to-resolve-gst-issues-2301515.html dated 10th June-2017)

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Foreign Trade Policy review: Com Min likely to extend incentives for exporters

With exporters raising concerns over working capital issue under the upcoming GST regime, the commerce ministry is expected to provide incentives such as enhanced interest subsidy to sectors like agri commodities to boost exports.

The incentives could be announced as part of the foreign trade policy (FTP) review, an official said.

"Currently we are not getting interest subsidy benefits. The government should consider extending this to us besides other incentives so that we can increase rice exports," KRBL CMD Anil Mittal said.

KRBL is a leading rice exporter and sells basmati rice under India Gate brand.

The Federation of Indian Export Organisations (FIEO) too said that the cost of liquidity is high and the government should look at ways to reduce that.

"The ministry should look at increasing the interest subsidy and Merchandise Exports from India Scheme (MEIS) each by 2 per cent," FIEO Director General Ajay Sahai said.

He added that cost of business would go up for exporters under the Goods and Services Tax (GST), to be rolled out from July 1, as exporters have to pay the duties first and then seek refund.

According to FIEO, due to this, working capital worth over Rs 1.85 lakh crore would be stuck with the government in the new indirect tax regime. Currently they get ab-initio exemptions on duties.

As part of the FTP review, the ministry is consulting all stakeholders on providing support to certain sectors to boost exports. The ministry has aimed at completing the review process before the GST rollout.

Under MEIS, the government provides duty benefits at 2 per cent, 3 per cent and 5 per cent depending upon the product and country.

In 2015, the ministry had announced 3 per cent interest subsidy for exporters to cut cost of credit for sectors including SMEs, handicrafts, agri and food items.

Although the country's overseas shipments have started showing positive growth, global economic situation is still not improving at a healthy rate.

India's exports rose by 19.77 percent to USD 24.63 billion in April.

(Source:-http://www.moneycontrol.com/news/business/economy/foreign-trade-policy-review-com-min-
likely-to-extend-incentives-for-exporters-2301609.html
dated 11th June-2017)

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GST will help in e-commerce export, but clarity on policy needed: Stakeholders

NEW DELHI: Though e-commerce players are expecting a surge in exports after the roll-out of India's landmark Goods and Services Tax (GST) reform, industry stakeholders feel there is a need to expand the categories for benefits under the export policy.

"The subsuming of major central and state taxes in GST, complete and comprehensive set-off of input goods and services and phasing out of central sales tax (CST) would reduce the cost of locally manufactured goods and services," VishwaShringi, Co-founder and Chief Executive Officer, Voylla Fashion, told IANS.

"This will increase the competitiveness of Indian goods and services in the international market and give a boost to exports."

A few players in the e-commerce sector feel that under the current foreign trade policy, there is a "lack of clarity" in terms of e-commerce exports.

"The policy is not foolproof right now. It is just an overview... not the in-depth information on what exactly the process and procedure is," Navin Mistry, Director of Retail Exports, eBay India, told IANS. "The custom process of how to ship an item is not so clear," he added.

Under the Merchandise Exports from India Scheme (MEIS), introduced by the Foreign Trade Policy (FTP) 2015-20, the Commerce Ministry gives benefits to several products as "duty credit scrips". However, the category of products in e-commerce exports, which are eligible for those benefits, are very limited, said Mistry.

"The policy is limited to only six categories. It does not expand to gems and jewellery or any new category. There is potential, but people are not aware about. That is the fundamental problem right now," he said, adding that it is a challenge for a very small or a medium-sized player to come online because they do not understand the policy clearly.

According to a study titled "Exploring Potential of E-Commerce for Retail Exports of Indian MSMEs in Manufacturing Sector", the total potential for business-to-consumer (B2C) e-commerce retail exports from India is estimated at approximately $26 billion, of which $2 billion can be achieved by 2020 from 16 product categories.

It highlighted that in order to provide a fillip to exports of micro, small and medium enterprises (MSMEs) through e-commerce, there is an urgent need for the government to recognise retail e-commerce exports as an industry and work towards removing regulatory barriers including reviewing the the FTP policy.

The study was jointly prepared by the Federation of Indian Chambers of Commerce and Industry, Indian Institute of Foreign Trade-Centre for MSME Studies and Apex Cluster Development Services. It was also supported by e-commerce platform eBay India.

E-commerce major Amazon India recently came up with a workshop for small and medium businesses to educate them on the global opportunity, brand building, documentation, listing methodology and services.

Since our launch in India in June 2013, we have been continually exploring opportunities to support the growth of Indian sellers in the emerging digital economy," an Amazon India spokesperson, who declined to be named, said.

"As part of this, we launched our Global Selling Program here in 2015 that enables Indian businesses to take their 'Made in India' products to millions of active customers across the globe through Amazon's 10 global marketplaces."

Mistry said: "There are policy hurdles, but all fundamental pieces need to work together. It is the fundamental job of the policymakers and all agencies that are part of the chain to enable better ease of doing business."

(Source: http://economictimes.indiatimes.com/news/economy/foreign-trade/
gst-will-help-in-e-commerce-export-but-clarity-on-policy-needed-
stakeholders/articleshow/59105401.cms
dated 12th June 2017)

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Govt working on proposal to merge DGFT with CBEC

The government is working on a proposal to merge the Directorate General of Foreign Trade (DGFT) with Central Board for Excise and Customs (CBEC) to promote ease of doing business for exports and imports.

The DGFT and CBEC are under the ministries of commerce and finance, respectively.

The proposal also assumes significance as a bulk of the current work profile of the foreign trade regulator DGFT is going online with digitisation and rollout of the goods and services tax (GST).

The DGFT, headed by an Indian Administrative Service (IAS) officer, facilitates exports, formulates foreign trade policy and administers programmes such as the Merchandise Exports from India Scheme, Advance Authorisation and Export Promotion for Capital Goods. Indian Trade Service (ITS) cadre officials mainly work in this body.

According to sources, the matter was discussed recently in an inter-ministerial meeting convened by the Cabinet Secretariat.

"There are some synergies between customs and the DGFT. The two can be merged so that policy and implementation is with one body. Outward looking infrastructure support related activities will be taken care of by the DGFT post-merger," they said.

With the focus on digitisation, most of the activities are now being handled online like providing export-import code numbers and the like. Once the new indirect tax regime GST comes into effect, all the remaining work will be carried out digitally, sources added.

As India is also implementing the WTO's trade facilitation agreement, it would be prudent that all trade facilitation related work comes under a single body.

According to the World Bank's ease of doing business report (2017), India is ranked 130th out of 190 economies and further lower at 143rd when it comes to 'trading across borders'

(Source: http://www.thehindubusinessline.com/companies/govt-working-on-proposal-to-merge-dgft-with-cbec/article9726943.ece date 14th June-2014)

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India slaps anti-dumping tariff on Taiwan's chemical firms

Taipei, June 17 (CNA) India has imposed an anti-dumping tariff on Taiwan's chemical exports after an investigation found that Taiwanese hydrogen peroxide firms sold their products at unfairly low prices in the Indian market, according to the Ministry of Economic Affairs (MOEA).

The MOEA said that Taiwan's hydrogen peroxide exporters face an anti-dumping duty of US$56.33 per ton as the probe found that the exports from Taiwan imposed material adversary damage on the Indian hydrogen peroxide market.

In addition to Taiwan, India has also slapped a financial burden on hydrogen peroxide firms from Bangladesh, South Korea, Indonesia, Pakistan and Thailand, which have faced anti-dumping tariffs ranging between US$27.81 and US$117.94 per ton, the MOEA said.

The MOEA said that the tariffs will continue for five years.

Hydrogen peroxide is used in a wide range of industries such as the textile, leather, paper and wood sector for corrosion control and bleaching purposes. It also has therapeutic uses as an antiseptic and antibacterial agent.

National Peroxide Ltd. and Hindustan Organic Chemicals Ltd., two of the major Indian chemical firms, had jointly filed the application to request the local authorities to launch a dumping probe against hydrogen peroxide exporters from the six countries.

India's Directorate-General of Anti-dumping and Allied Duties (DGAD) in its final ruling concluded after an investigation conducted in 2016 that the chemical was dumped in India and that the dumping has impacted the domestic industry. The DGAD recommended anti-dumping duties against the six countries and the Indian Ministry of Finance has decided to impose the tariffs.

The MOEA said that Taiwan was the smallest hydrogen peroxide supplier in 2014 to India among the six countries in the anti-dumping case, selling 2,034 tons of hydrogen peroxide worth US$730,127 to the country.

In 2015, Taiwan's hydrogen peroxide exports to India fell to 482 tons and were valued at US$171,454. Last year, Taiwan's exports fell to zero and such a trend continued into this year, the MOEA said.

According to the MOEA, China, Israel and Singapore were the three largest hydrogen peroxide buyers from Taiwan, and their purchases totaled US$2.63 million, US$310,000 and US$190,000, respectively, during the first five months of this year.

The MOEA said that so far no Taiwanese hydrogen peroxide exporters have responded to India's move to impose the anti-dumping duty.

The ministry said, however, that the MOEA will provide necessary assistance to any exporters which will seek legal redress from the anti-dumping duty.(Source:http://focustaiwan.tw/news/aeco/201706170004.aspx dated 17th June-2017)

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Trade policy eye on GST

New Delhi, June 18: The government may come out with incentives, including an enhanced interest subsidy, to boost shipments in the mid-year review of the foreign trade policy.

The policy is expected to be announced ahead of schedule to ensure a parallel rollout with GST in July.

"The incentives could be announced as part of the foreign trade policy (FTP) review," a senior commerce ministry official said.

Officials said the Merchandise Exports from India Scheme (MEIS) is being changed to make exports from India GST-compliant.

The move could address the concerns of exporters who are worried over a working capital crunch following the implementation of goods and services tax (GST).

Under GST, exporters will have to first pay the required duty and seek a refund.

According to estimates, exporters' working capital of up to Rs 1.85 lakh crore annually could get stuck because of the refund process.

"The ministry should look to increase the interest subsidy and MEIS (duty benefit) each by 2 per cent," Ajay Sahai, director-general of the Federation of Indian Export Organisation (FIEO), said.

Under MEIS, introduced by the Foreign Trade Policy 2015-20, the commerce ministry gives benefits to several products as "duty credit scrips" which can be used to import inputs by the exporter or sold to other entities.

Under MEIS, the government provides duty benefits at 2 per cent, 3 per cent and 5 per cent, depending on the product and country.

In 2015, the ministry had announced a 3 per cent interest subsidy for exporters to cut the cost of credit for sectors, including SMEs, handicrafts, farm and food items.

The policy review will focus on propelling small and medium units, which generate jobs, and also look at the possibility of enhancing the scope of rupee trade by getting into a currency swap with the Southeast Asian countries

The commerce ministry may prune the ambitious target of goods and services export of $900 billion set for 2020 fixed in the five-year foreign trade policy.

(Source: https://www.telegraphindia.com/1170619/jsp/business/story_157563.jsp dated 19th June-2017)

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After GST Facilitation Cell, DGFT comes up with Help Desk for GST issues related to FTP

New Delhi, June 19 (KNN) After coming up with Goods & Services (GST) Facilitation Cell, the Directorate General of Foreign Trade (DGFT) has launched a Help Desk for GST issues related to Foreign Trade Policy (FTP).

"…it is decided to constitute a GST Help Desk in DGFT Headquarters to reply queries on GST related to Foreign Trade Policy," DGFT said in a notification.

The GST Help Desk can be contacted over phone at 011-23063080/ over e-mail id gstcell-dgft@gov.in.

Last week, DGFT had constituted a 'GST Facilitation Cell' in DGFT Headquarter and all Regional offices of DGFT to serve as the first point of contact for addressing any issues regarding GST in respect of Foreign Trade Policy.

The moves aim to ensure smooth and successful rollout of GST with effect from July 1, 2017.

'GST Facilitation Ceil', DGFT is headed by Nikunj Kumar Srivastava, Additional DGFT (email: nikunj.srivastava@nic.in) and Rakesh Kumar, Joint DGFT (email:r.kumar73@nic.in) &KaushlendraPratap Singh, Deputy DGFT (email: kaushlendrap.singh@nic.in) as members of the Cell.

On the same lines, all Regional Authorities have been advised to constitute a similar 'GST Facilitation Cell' for addressing GST related issues in respect of Foreign Trade Policy. (KNN Bureau)

(Source: http://knnindia.co.in/news/newsdetails/sectors/after-gst-facilitation-cell-
dgft-comes-up-with-help-desk-for-gst-issues-related-to-ftp
dated 19th June-2017)

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The flip side of GST: its impact on the informal economy

Jewelry is one of the sectors which has a high composition of unorganized firms, according to analysts.
 

The move to GST has the potential to cause immense disruption to the shadow economy that is the source of livelihood for many

The markets are gung-ho about the shift to the goods and services tax (GST). One factor driving this optimism is the anticipated shift of business from small, unorganized firms in some sectors to organized ones. Since the latter are already in the formal economy, comply with regulations, are generally larger in size and pay taxes, the switch will be much easier for them, which will ultimately translate into increased market share.

Analysts have been preparing lists of companies that will benefit in sectors such as apparel, tiles and sanitary ware, plywood, textile, footwear, electrical equipment and appliances, and plastics and packaging. All these sectors have a high composition of unorganized firms (see chart).

For example, analysts expect the share of the informal segment in the tiles industry to decline from 40% currently to 20%. Similarly, nearly 60% of the ready-mixed concrete market is unorganized. In the light electrical segment, more than 35% of the businesses are in the informal sector. Certainly, this augurs well for larger companies in the organized sector. This also comes at a time when volume growth has just recovered from the effects of demonetisation and corporate India is desperate for a much-awaited earnings recovery.

But the gain in market share of listed companies means a corresponding fall in the share of units operating in the informal economy. GST is sure to take a toll on the financial health of small- and medium-sized enterprises (SMEs) operating in these sectors. Economists say that the informal or unorganized sector accounts for nearly 50% of India's gross domestic product and is responsible for more than 80% of total job creation in the country.

Many of the firms operating in this part of the economy make profits largely due to tax evasion and non-compliance with regulatory norms, which allows them to offer products at comparatively lower prices. However, in the GST-era, it will be a struggle for survival for such firms because they will be faced with taxes, lower margins and a sharp spike in the cost of compliance. Some firms in the unorganized sector may go under, while others could find their profits curtailed. To be sure, in some instances the two sets of companies cater to different customers, but there is always some overlap. And it is not just the manufacturers in the informal economy who will suffer but also the smaller dealers and wholesalers.

The economics of logistics under the GST regime also favour large companies in the organized sector.

A final decision on e-way bills, which will have a significant impact on the logistics sector and logistics cost of manufacturers, is pending. When implemented, this should result in a decline in transit time due to elimination of multiple checkpoints and consolidation of warehouses. This will aid large companies that operate across India and offset some of the cost advantages that regional and small firms, usually those in the unorganized sector, enjoy.

The point is that the squeeze on the informal economy may well lead to job losses, which could then start hurting demand. So while companies in the organized sector could benefit, there could be distress in the informal economy. Indeed, the situation could be a repeat of what happened during demonetization, when the informal sector was the hardest hit.

The move to the new tax regime has the potential to cause immense disruption to the shadow economy that is the source of livelihood for many, although it is nobody's case that firms that survive by flouting regulations and evade taxes continue to do so.

With the 1 July deadline around the corner, there are many SMEs who are ill-prepared for the transition. Those of them who fail to make it on time will be out of business, thus leading to increase in unemployment, at least initially, caution analysts.

The switch to GST will increase the size of the formal part of the economy and increase productivity, but it will also extract a cost from the most vulnerable firms and workers.

(Source http://www.livemint.com/Money/Hr30Wh3Bg3MAyelpa7bOXM/The-flip-side-of-GST-its-impact-on-the-informal-economy.html dated 22nd June 2017):

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India to sharply cut export target in mid-term review of Foreign Trade Policy

(The previously set USD 900 billion goods and services exports target by 2020 now appear increasingly unachievable given still shaky conditions in the world economy)

Tepid global demand and shaky conditions in Europe—India's biggest overseas shipment market—may force the government to significantly scale down the previously set USD 900 billion goods and services exports target by 2020, which now appear increasingly unachievable.

A new target will be announced on July 1, when Commerce Minister Nirmala Sitharaman presents the review of the mid-term foreign trade policy.

"The revised export target will not be as ambitious. It will be substantially brought down after the conclusion of mid-term review (in the next one week)," a senior government official told Moneycontrol.

India's total exports in 2016-17 stood about USD 435 billion. This include merchandise exports worth USD 275 billion and about USD 160 billion of commercial services exports, up about 5 percent over last year. If the same trend persists, exports would touch about USD 525 billion by 2020, short by nearly USD 400 billion than the original target.

According to top traders' body Federation of Indian Exports Organisation (FIEO), the government needs to revisit its export target and set it in line with prevailing conditions.

"Looking into the performance of India's export in 2015-16, if we have to reach the figure reflected in the foreign trade policy, you require a compounded annual growth of around 28 percent or so, which is not possible. At 15-17 percent growth, we can reach an export of around USD 700-725 billion. We need to revisit the target and put it around that number," Ajay Sahai, Director General, FIEO said.

In March 2015, India had released its Foreign Trade Policy (FTP-2015-20), fixing an ambitious target for goods and services exports to USD 900 billion by 2020, in a bid to increase the country's share of world exports from 2 per cent to 3.5 per cent.

Merchandise exports slumped for two successive years as shipment orders dried out from the big markets in Europe and China. Merchandise exports fell (-) 1.29 percent in 2014-15 at USD 310.34 billion, and plunged nearly 16 percent in the following year with exports at USD 262.30 billion.

Goods exports have revived since the middle of 2016-17, growing 4.7 percent to USD 274.65 billion, but not quick enough to help reach USD 900 billion overall exports target in the next three years.

"The target is challenging," said Sanjay Budhia, chairman, national committee on exports at the Confederation of Indian Industry (CII). "Exports need to be more cost competitive. Foreign exchange stability is required and India needs to remove logistics and infrastructure bottlenecks".

According to Sahai, when the export target for 2020 was fixed, the government had thought that the global trade will help the exports of the country.

(Source:http://www.moneycontrol.com/news/trends/current-affairs-trends/india-to-sharply
-cut-export-target-in-mid-term-review-of-foreign-trade-policy-2310985.html
dated 23rd June-2017)

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Ahead of GST, customs dept reworks systems

The Centre is working with exporters and importers to prepare them for the Goods and Services Tax (GST) that will be implemented from next month.

Customs duty will not be subsumed under the new levy, which includes only central excise duty and service tax. However, imports will be considered an inter-state supply and will attract IGST (Integrated GST), while exports will be zero-rated. Full refund of tax will be available.

For many imports, counterveiling duty and special additional duty of customs will also not be levied. Accordingly, laws and procedures as well as IT systems of the two levies are being synced to process refunds and check duty evasion.

Launch campaigns

While the Department of Commerce and the Directorate General of Foreign Trade have already been working on creating awareness, the Central Board of Excise and Customs has also asked the customs department to launch such campaigns and clarify doubts.

Apart from the levy of IGST and compensation cess, the refund on exports of goods will depend on the filing of shipping bills along with the GST invoice and export general manifest.

"The readiness of the customs administration and trade shall be crucial for the smoothroll out of GST," said a recent CBEC missive.

It further said changes in customs law and procedures have to be accompanied by changes in the electronic data interchange system.

The information in the bill of entry by importers will be cross-checked with their GSTN returns. Further, importers will also be expected to declare their GST registration number or GSTIN to claim credit on the IGST paid. Similarly, the CBEC has modified the shipping bills to electronically capture details such as GSTIN of the exporter and GST export invoice. Gradually, only details of GSTIN and Permanent Account Number will be required in the shipping bills, CBEC has further said. Earlier, the Department of Commerce had also announced that it would align the mid-term review of Foreign Trade Policy with the rollout of GST for the convenience of exporters and industry.

(Source: http://www.thehindubusinessline.com/economy/ahead-of-gst-customs-
dept-reworks-systems/article9735253.ece
dated 23rd June-2017)

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Incentive schemes for exporters to continue post GST: Commerce Secretary Rita Teaotia

Deemed exports refer to the transactions in which the goods supplied do not leave the country and the payment for such supplies is received either in Indian currency or in free foreign exchange.

The incentive schemes designed for promotion of exports will continue even after the GST roll out from July 1, while the government may do away with the deemed export benefits, a top official said on Friday.

Deemed exports refer to the transactions in which the goods supplied do not leave the country and the payment for such supplies is received either in Indian currency or in free foreign exchange.

The government is committed to continuing incentive schemes for export promotion, Commerce Secretary Rita Teaotia said while addressing exporters at an event.

However, she clarified that deemed export benefits may discontinue, as all will get level playing field in the Goods and Services Tax (GST) regime, FIEO said in a statement.

While replying to the concerns of exporters due to regular break down in an icegate server of customs, she said the department is in the process of upgrading the system so that all the issues of the exporters and importers will be solved.

Open House session was organised by the Federation of Indian Exports Organisation (FIEO) to invite suggestions from exporters on the measures needed in foreign trade policy.

Exporters presented in the programme from various sectors, including engineering, textiles, pharma, defence, and silk, argued for a continuation of all schemes to make Indian products competitive as well as the need for exemption route instead of paying tax and then claiming a refund.

Dr. A Sakthivel, Regional Chairman, FIEO (Southern Region) said that paying GST and take refund will block working capital of exporters, which is costly compared to our competing countries.

He also highlighted various anomalies like non-inclusion of garments manufacturers in the 5 percent GST announced for the textiles industry.

(Source: http://www.moneycontrol.com/news/business/incentive-schemes-for-exporters-to-continue-post-gst-commerce-secretary-rita-teaotia-2311531.html dated 23rd June-2017)

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In Modi, Trump has a partner who can make US-India relations a win-win

During his six-day, four-nation tour of Europe last month, Indian Prime Minister Narendra Modi injected energy and enthusiasm in India's relations with Germany, Spain, Russia, and France. The high-profile tour garnered great attention and praise in India and Europe. The prime minister's visit to the United States this week presents a similar opportunity for the Trump administration to chart a more ambitious course for US-India relations. President Trump should use the summit meeting to signal his intention to elevate bilateral ties to new heights.

Upgrading US-India relations is a safe and winning long-term bet for an administration facing a surfeit of near-term challenges and bad press. There is broad bipartisan support in the US Congress for stronger ties as well, as a deep affinity between the people of both countries. A closer partnership with a democratic and economically vibrant India that shares many of the United States' interests in East Asia would be a clear win for the administration. To achieve it, the administration will need a successful summit followed by sustained diplomatic attention on India.

The administration can build on the strong foundation of defense and security cooperation already in place. But a realistic blueprint for closer ties will involve traversing thorny issues of mutual concern, while developing a shared set of principles for cooperation in South and East Asia. The administration will also need to push for a tangible agreement that advances economic ties, the area where the two countries have made the least progress in recent years.

At the summit, the first step for the two leaders will be to get to know one another and commit to continuing the extensive diplomatic engagement that started under the George W Bush administration and became a norm during the Obama administration. The announcement of an official visit by Trump to India in the next year would set the right tone. Equally important will be scheduling regular diplomatic visits between the two capitals and an early date for the next round of the US-India Strategic and Commercial Dialogue.

Second, it would be prudent for Trump to relay that his government will maintain regular dialogue with India on two of its primary areas of concern—the United States' Afghanistan strategy and its immigration policy.

On Afghanistan, India will look for assurance that the United States is committed to the stability of the current government, primarily by continuing its troop, investment, and aid commitments. A signal from Trump that he understands and appreciates India's concerns and that his administration will keep India apprised of any upcoming policy changes would go a long way in building trust.

Modi is also likely to push for limited changes to the US H-1B worker visa program, of which it is the largest beneficiary, and raise concerns about troubling attacks against Indians and Indian-Americans in the United States. The president can allay India's fears by conveying that he will work with Congress to find a balanced approach to worker visas that targets abuse but does not explicitly reduce the number of visas on offer. Regarding hate crimes, he should reiterate that he will speedily and unequivocally condemn any future attacks. In both cases, follow through will be critical.

Third, in their meeting, the two leaders should strive to develop a shared understanding of their interests in the Asia-Pacific and Indian Ocean region, where the United States would appreciate greater engagement from India in supporting a rules-based regional order, managing peace and stability, and promoting shared prosperity through regional economic integration. Modi has gone further than any previous Indian leader in publicly siding with the United States on critical issues in East Asia. He has echoed US concerns about resolving maritime disputes in the South China Sea peacefully. As part of his Act East policy, Modi has literally put India's money where its diplomatic mouth had been for years. Trump should be ready to display his commitment to this vision—perhaps by finally supporting India's bid to join the Asia Pacific Economic Cooperation (APEC) forum.

Identifying a set of shared strategic priorities will help advance bilateral security cooperation, which is closer today than ever before, including in areas likes counter-terrorism that are priorities for the President. India has become a major buyer of US arms, and the two militaries hold numerous joint exercises every year. The 2016 Logistics Exchange Memorandum of Agreement, which envisions interoperability of US and Indian forces, is groundbreaking, but making it a reality will depend on the two governments' ability to build trust and facilitate greater strategic convergence.

Fourth, to take the relationship to the next level, the two leaders will need to elevate their economic partnership, which holds great promise but has cooled in recent years. Market access and intellectual property disputes have impeded progress and are unlikely to disappear. However, there are positive signs as well. Under Modi, India has significantly liberalized its foreign investment regime and is at work to become an easier place to do business. Until now, India has shown little appetite for a serious bilateral investment treaty (BIT) much less as a free trade agreement with the United States. Trump should encourage Modi to make a high-caliber US-India BIT a joint goal that imbues the economic relationship with the kind of optimism and momentum the relationship has seen on other fronts.

Such a move, along with pushing for a closer partnership with India, is timely. In Modi, Trump has a counterpart that he can work with. Much like the president, Modi is a nationalistic, pro-business leader who is willing to make compromises and act decisively in pursuit of a larger goal.

Coming off landslide victories in recent state elections in India, Modi also has the political capital to make bold decisions. He is well positioned to win re-election in 2019, giving him the capability and time to see through a real advancement in US-India relations.

The June meeting will be a celebration of how far US-India relations have come, and an ice-breaker for the two leaders. Then—if president Trump wants—the real work can begin.

(Source: https://qz.com/1014331/donald-trump-and-narendra-modi-meeting-in-washington-an-opportunity-in-us-india-relations/ )

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Adopting security measures will ease chemical exports: experts

Ahmedabad, Jun 26 () There are economic incentives for Indian chemical industry to improve security measures of their facilities as per requirements of US authorities, chemical security experts from the USA, said here today.

Compliance to certain security programmes will help speed up exports to the USA, they said. "Indian chemical industry is definitely ascending in terms of security. There are economic incentives to comply with security programmes. There are also economic incentives in ensuring you have safe and secure facilities," said Allan Milojevich, a non-proliferation specialist with Oak Ridge National Laboratory, a unit of US Department of Energy.

USA accounts for Rs 10,000 crore of Rs 26,600 crore chemical exports from India annually. Gujarat accounts for around 18 per cent of total chemical exports from India. James Snyder, a US-based risk management advisor, said that compliance to security guidelines will reduce costs by expediting the process of export.

He urged industry units to also obtain Customs-Trade Partnership Against Terrorism (C-TPAT), a voluntary supply chain security programme led by the USA. "Compliance to security requirements reduce cost. By thinking about global best practice and security measure, we can secure our world. There are no hard and fast requirements but there are incentives. The C-TPAT applies to US companies as well. This helps reduce customs inspection," he said.

Snyder said that other countries are also adopting the same criteria in order to create a world-wide security regime so that chemical products are not diverted for their use to make chemical weapons and explosives.

The experts were talking to the media ahead of their participation in a five-day workshop on chemical security assessment organised by the Gujarat Chemical Association (GCA), an industry association with around 700 members.

Jaimin Vasa, president of GCA, said that chemical security assessment of the industry will help decide necessary actions to assure that risks inherent with the use and application of chemicals by adversaries are minimised to protect the environment, infrastructure, and life. He said nearly 80 per cent of the industry in the state, which contributes to 18 per cent of India's chemical exports, still need to comply with security standards.

(Source: http://timesofindia.indiatimes.com/business/india-business/adopting-security-measures-will-ease-chemical-exports-experts/articleshow/59321536.cms dated 26th June-2017)

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PM Modi to visit Portugal, Netherlands, US beginning June 24

Announcing Modi's tightly packed schedule, External Affairs Ministry spokesperson Gopal Baglay said the Prime Minister would hold talks with Antonio Costa, the Portugal Prime Minister of Indian origin, in Lisbon before flying to the USA where he would meet President Donald Trump.

Prime Minister Narendra Modi will visit Portugal, the Netherlands and the U.S. beginning June 24, during which he will hold talks on key bilateral issues including boosting of trade and security ties.

On June 26, he is scheduled to hold talks with President Donald Trump on a wide range of issues. However, after India cancelled a bilateral investment treaty with the Netherlands previous year, that will have to wait until India and the European Union ink a trade and investment agreement which will apply to all 27 European Union countries.

"All areas of bilateral cooperation and also concerning with the region, the global situation, security, terrorism, stability will be discussed". During the forthcoming visit of the Prime Minister Modi to Portugal, we look forward to continue that momentum.

Trump's recent withdrawal from the Paris Agreement on fighting climate change created fissures in the India-US ties, especially with Trump commenting that India signed the pact only because it expected "billions and billions" in aid.

Asked about any event being planned with the Indian community in Washington, he said it was being explored but nothing has been finalised. "However, I might say that the programme is still evolving", Baglay said.

"We are working on several documents to strengthen India-Portugal economic, scientific and cultural engagements and we expect to finalise and sign these documents essentially which are in the nature of memorandum of understanding", Baglay said.

The spokesperson said Prime Minister Modi will hold official talks with the Prime Minister of Portugal- Antonio Costa and is also expected to call on the King of that country.

Costa, who is of a Goan descent, visited India earlier this year as the chief guest at the PravasiBhartiya Divas in Goa.

PM Modi will meet US President Donald Trump during his visit to Washington.

Modi's trip to the European country marks New Delhi and Amsterdam marking 70 years of diplomatic ties. The Netherlands is one of India's biggest investors, with one of the largest sovereign wealth funds which India could tap into. Economic relations form the core of bilateral relations between India and The Netherlands.

(Source: http://normangeestar.net/2017/06/27/pm-modi-to-visit-portugal-netherlands-us-beginning-june-24/ dated 27th June-2017)

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India allows select commodity export to Maldives

It added that the shipments of these items to Maldives will be exempted from any existing or future restrictions or prohibition on exports. To increase domestic availability of potato and onion, India sometimes imposes minimum export price on these agri commodities.

The government has allowed export of certain quantity of select commodities to Maldives for 2017-18 without any policy restrictions and prohibitions under a bilateral trade agreement. The Directorate General of Foreign Trade (DGFT), under the commerce ministry, in a notification has said this decision is effective till April.

It has permitted shipments of potato (11,714.45 tonnes), onion (19,466.36 tonnes), rice (67,640.24 tonnes), wheat flour (59,442.17 tonnes) and sugar (11,706.3 tonnes). Export of these essential commodities "has been permitted to Maldives under the bilateral trade agreement between India and Maldives during 2017-18".

It added that the shipments of these items to Maldives will be exempted from any existing or future restrictions or prohibition on exports. To increase domestic availability of potato and onion, India sometimes imposes minimum export price on these agri commodities.

In a separate notification, the DGFT has restricted the number of countries to which certain chemicals under the Special Chemicals, Organisms, Materials, Equipment and Technologies (SCOMET) category can be exported without licence.

Earlier, the export was allowed to states party to the Chemical Weapons Convention (CWC) without an export licence. However, these shipments are permitted subject to certain conditions.

The exporter will have to notify the national authority CWC, the Cabinet secretariat, the Department of Chemicals and Petrochemicals, the Disarmament and International Security Affairs division of the external affairs ministry and the DGFT, within 30 days of such export in a prescribed format.

(Source: http://indianexpress.com/article/business/world-market/india-allows-select-commodity-export-to-maldives-4725827/ dated 28th June 2017)

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GST will boost purchasing power

The biggest benefit (expected) for a consumer is that the price of most goods are likely to come down under the GST regime. Various reasons like increased competitiveness, avoidance of tax cascading effect, increased credit flow, supply-chain optimization and savings in transportation costs are expected to bring down the prices in the long run.This will increase the purchasing power of common man without any real increase in their income. Just to ensure that the benefits of GST reach everyone, government has included strict antiprofiteering provisions in the GST Law.

What will become costlier or cheaper in Kerala?

Since the rate applicable for many services has increased to 18% (from the present 15%), services are likely to become costly . The price of small cars and used ones will increase. Kerala being the biggest consumer of gold, the rate of 3% is expected to bring down gold prices.These apart, the prices of most consumer goods are expected to dip in the long run.

It is also understood that the state government is planning to publish a list of items for which the prices should ideally come down due to the introduction of GST.

How will GST affect a small medium company that sells products in other states? How should it prepare for the new tax regime?

Kerala is characterized by the existence of a large number of small and medium companies that are engaged in inter-state supplies. Sellers will need to collect GST at full rate (same as that of local sales) in place of the concessional CST @ 2% presently levied for interstate sales to registered re-sellers. But, there is an added advantage for such buyers that the entire GST - so paid at a full rate - will be eligible for input tax credits. However, the increase in working capital requirements due to higher tax rates on procurement may make competition tougher.

For a smooth transition under the GST regime, companies shall take steps to enrol under GST, revamp its IT systems, update master records of customers and vendors, ensure that the benefits of reduction in tax rates and higher input tax credits are passed on by suppliers, account all pending invoices before June 30, file all returns under current law properly disclosing the available carry forward input tax credits, determine stock of goods available on June 30 and ensure that input tax credits are carried forward

Kerala is destination of imports - cashews from Africa, wooden furniture from Malaysia and Indonesia, electrical and electronic products from China. How will these be affected by GST? What can an importer of these products do?

GST will abolish certain components of customs duty such as countervail ing duty (CVD) and special additional duty (SAD) and replace it with IGST (the rate equal to GST rate applicable to such products in India). However, basic customs duty will continue on imports along with IGST as import into India will be considered as an inter-state supply subject. This means that customs duty payment may go up marginally for many items. The good news is that IGST paid on such import will be available as a credit for every registered person including traders, under GST regime.

The structure of export linked exemption schemes under foreign trade policy (FTP) is changing and the duty exemptions will get limited to BCD. The attraction and desirability of some of the key schemes under FTP like EOU, STP, Advance authorization, etc will fundamentally change in the GST regime.

(Source: http://timesofindia.indiatimes.com/city/kochi/gst-will-boost-purchasing-power/articleshow/59362248.cms dated 29th June-2017)

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BUSINESS WITH LATIN AMERICA - MEXICO HAS EMERGED AS THE TOP DESTINATION OF INDIA'S EXPORTS TO LATIN AMERICA

Mr. R. Viswanathan, also known as Rengaraj Viswanathan, is a retired Indian diplomat, writer and speaker specializing in Latin American politics, markets, and culture.

Mexico has emerged as the top destination for India's exports to Latin America with a record high of 3.38 billion US dollars in 2016  (January- December).

For those Indians who think that Mexico is too far and less important for India's trade than the neighbors or the traditional trade partners, here are the statistics to open their eyes:  India's exports to Mexico in 2016 are more than its exports to the neighbors such as Indonesia –3.13 bn, Thailand-2.96 bn, Iran-2.41 bn and Myanmar-1.13 bn; and more than to the traditional partners: Russia-1.81 bn, Canada-1.97 bn, Australia-2.95 bn, South Africa-3.24 bn, Spain-3.36 bn, and Egypt-2.09 bn.

While India's exports to Latin America as a whole have declined in 2016, it is heartening to note that the exports to Mexico have increased by an impressive 22 percent from last year (2.77 bn) and doubled from 1.56 bn in 2012. In Latin America, Mexico has overtaken Brazil (2.3 billion dollars) in 2016 as the largest market for India's exports.

What is even more interesting is that Mexico has emerged as the biggest market for India's vehicle exports which amounted to 1.83 bn.  Mexico accounts for 13% of India's global exports of vehicles which stood at 14.98 billion in 2016. This is remarkable in view of the fact that Mexico itself exports 80 billion dollars of vehicles and is the fourth largest exporter in the world. India's vehicle exports to Mexico have increased by an incredible 56% from 2015 (1.17 bn), 83 % from 2014 ( 1bn) and from a mere 397 m in 2012.

The major exports to Mexico are: vehicles –1.83 bn, Other engineering goods – 590 million, chemicals – 333 m, textiles- 214 m, plastics-83 m and pharmaceuticals- 47 m.

India's imports from Mexico were 2.44 billion dollars in 2016, down from 3.44 bn in 2014 due to the drastic fall in the prices of crude oil which accounts for 60 % of India's total imports from Mexico. Crude imports in 2016 were 1.48 billion dollars, down from 2.74 bn in 2014. India is the third largest destination for Mexican crude exports which have the potential to increase in the coming years. The other import items: engineering products –593 million dollars, gold-77m, chemicals-76m, optical products –57 m, and ores-54m.

Mexico is the second largest market in Latin America with a population of 126 million and GDP of 1.15 trillion dollars. It is a politically stable country with vibrant democratic credentials. The macroeconomic fundamentals are generally healthy and strong.  The average inflation in the last decade was just 4.3%. The Mexican economy grew over 2% in the last two years, while Latin America as a whole had suffered GDP contraction in 2015 and 2016. The Mexican GDP growth rate in 2017 is projected to be around 2%. Mexico is the largest trading nation in Latin America, accounting for about 40% of the  region's external trade. Its market is open with low tariffs and predictable and investor-friendly policy regime. In the last four years, it has carried out many reforms opening up the previously restricted sectors such as energy. It has become a manufacturing hub of Americas with global leadership position in some consumer appliances and competitive in aerospace and high-tech industries. Manufactured products account for over 80% of exports unlike the South American countries which are dependent on exports of raw materials and commodities. Mexico is blessed with rich reserves of gold, silver, copper and other minerals as well as oil. However, Mexico has its own share of challenges which include drug-related violence and Trump's threats to deport Mexicans from US and disrupt NAFTA.

Thirteen Mexican companies have invested about a billion dollars in India. Around forty Indian companies have invested in Mexico in sectors such as pharmaceuticals, auto parts, IT and chemicals. Indian companies use Mexico as the platform for access to the markets of North and Central America with whom Mexico has signed FTAs. The Mexican Ambassador to India Melba Pria, known for her proactive economic diplomacy and riding in a colorful auto rickshaw with diplomatic number plate, has invited Indian IT professionals to use Mexico as the base for near-shore US operations, after Trump's H-1B visa restrictions.

The Indo-Mexican trade of 5.82 billion dollars in 2016 have the potential to reach 10 bn in the next five years. After Trump's trade threats, Mexico is trying very seriously to reduce its over dependence on the US market which accounts for 81% of its exports and 50% of imports. It wants to diversify its trade partnerships and intensify its engagement with large markets such as India. This is, therefore, the most opportune and unmissable time for India to accelerate its trade promotion activities with Mexico. The Indian government could extend an invitation for state visit to the Mexican President Nieto who is keen on a strategic economic partnership with India. It is imperative for India to sign a Free Trade Agreement to remove the tariff disadvantages faced by India's exports vis-a-vis the exports from the 45 countries which have signed FTA with Mexico.

Class 4.3 – Substances which, in contact with water, emit flammable gases

Water, water, everywhere,
And all the boards did shrink;
Water, water, everywhere,
Nor any drop to drink."
= The Rime of the Ancient Mariner

Transport regulations classifies substances (solids and liquids) which, by interaction with water, are liable to become spontaneously flammable or to give off flammable gases in dangerous quantities under Class 4.3.

Some of these substances may emit flammable gases which forms explosives mixtures with air and can be ignited with even an unprotected light bulb.
The decision logic for classification of Class 4.3 is based on Test methods given in the United Nations Manual of Tests and Criteria, part III, 33.4.1.

  1. Occurrence of spontaneous combustion at any step during the test, or
  2. At least 1 litre of flammable gas is generated by per kilogram of substance in an hour.

An example of Class 4.3 is 'CALCIUM CARBIDE', when in contact with water or moisture in air calcium carbide rapidly evolves acetylene, a highly flammable gas, which may be ignited by the heat of the reaction.

According to news reports the infamous 'Tianjin Blast' involved vast quantities of calcium carbide.

Another chemical under Class 4.3 is 'ALUMINIUM PHOSPHIDE' which is also toxic. Aluminium Phosphide when in contact with moist air or water evolve phosphine, a spontaneously flammable and highly toxic gas.

Pesticides made from aluminium phosphide falls under Class 6.1, toxic, however it will still evolve deadly phosphine gas. The rate of production is lesser than the classification criteria of Class 4.3.

All substances under Class 4.3 must be packed in hermetically sealed packagings. And certain solid substances permitted in bulk containers must be under a nitrogen blanket.

Packing Group for Class 4.3 is assigned on basis of reaction to water and rate of evolution of flammable gas as per below table.

Packing Group I

Reacts vigorously with water at ambient temperatures
and demonstrates generally a tendency for the gas produced to ignite spontaneously
or
The rate of evolution of flammable gas is equal to or
greater than 10 litres per kilogram of substance over any one minute

Packing Group II

Reacts readily with water at ambient temperatures
such that the maximum rate of evolution of flammable gas is equal to or greater than 20 litres per kilogram of
substance per hour,
and which does not meet the criteria for packing group I.

Packing Group III

Reacts slowly with water at ambient temperatures
such that the maximum rate of evolution of flammable gas is equal to or greater than 1 litre per kilogram of
substance per hour,
and which does not meet the criteria for packing groups I or II.

Shipboard Emergencies: if a package or container carrying Class 4.3 is on fire the firefighting is to be carried out as per FIRE SCHEDULE Golf.

General comments: In a fire, exposed cargoes may explode or their containment may rupture. Fight fire from a protected position from as far away as possible. Use of copious quantities of water at once is recommended to cool down the heat radiation of the fire and to cool down heated cargo nearby. Only as a secondary effect, water will start or intensify burning of that material. Do not use small quantities of water - this will react strongly.

On Deck Container on Fire: If the fire is not igniting nearby cargoes, let the fire burn. Otherwise, cool the burning transport unit with copious quantities of water. Try to avoid getting water into the container.

Under Deck Container on Fire: Stop ventilation and close hatches. The fixed gas fire-extinguishing system should be used. If this is not available: Do not use water onto the material in enclosed spaces under deck. With open hatches, cool nearby cargo with copious quantities of water, although the fire could intensify for a short period of time. Do not spray small quantities of water onto the fire, use copious quantities of water.

Special Firefighting Media: LITHIUM, non-pyrophoric and MAGNESIUM POWDER require the use of dry Lithium chloride or dry sodium chloride or graphite powder to extinguish the fire. Do NOT use water or foam.

Response to spillage on board ships are divided into different categories of Class 4.3 substances as below.

  1. Spontaneously Combustible, Water-Reactive Substances
  2. Hazard of Spontaneous Ignition
  3. Substances Reacting Vigorously with Water
  4. Substances Dangerous When Wet (Non-Collectable Articles)
  5. Substances Dangerous When Wet (Collectable Articles)

Class 4.3 label is upper half symbol of flame (black or white), figure '4' in bottom corner and background "blue".  The colour blue signifies dangerous reaction with water.

There are substances which are outside the classification criteria of Class 4.3 but still dangerous when carried in large quantities such as Direct Reduced Iron (DRI). Direct Reduced Iron is classified as "MATERIAL HAZARDOUS IN BULK" under The International Maritime Solid Bulk Cargoes (IMSBC) Code.

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CONTENTS

Chairman's Desk

Chemexcil Activities

Meeting of Shri Ajay Kadakia, Vice Chairman,Chemexcil with Shri ArunJaitley, Minister of Finance, New Delhi on 27th June 2017

Meeting on various chemical trade related issues with Honorable Minister of State Chemical & Fertilizers

Chemexcil's Participation in Chemspec Europe-2017 exhibition dated 31st May-2017 and 1st June-2017 at Munich, Germany

Stakeholder consultation meeting on Eurasian Economic Union (EAEU) and India FTA in Mumbai on 8th June, 2017

Chemexcil Seminar on "GST Trade Awareness" at Hotel Ramada, Ahmedabad

EXPORT AWARDS FUNCTION OF GDMA AT AHMEDABAD

Chemexcil submission for Board of Trade meeting on 20/06/2017 at New Delhi

OTHER SUGGESTIONS FOR SIMPLIFICATION OF PROCESS / REDUCTION IN TRANSACTION COST

Exim Updates

Duty Drawback- Amendments effective from 1.7.2017 to the All Industry Rates of Duty Drawback and other Drawback related changes.

V. IMP - Export procedures under GST Regime (Format of LUT / Bond, Sealing of containerized cargo etc.)

USTR Announces Results of the 2016/17 Annual GSP Review

IGST Rates for Goods & Services/Exemptions/ Reverse Charge etc

GST- 24×7 Helpdesk at JNCH for GST implementation

Preparation for Exports after GST Roll-out

Reminder - GST Enrolment available again from 25th June 2017

CBEC Advisory for Taxpayers reg. GST Migration

New Shipping Bills and Bill of Entry formats for Exporters / Importers

Contact Details of O/o GST Council and Sectoral Groups

Relaxation in return filing procedure for first two months of GST

DGFT Related GST FAQs -

GST Help Desk at DGFT HQ- Contact Details

Anti-dumping Investigation by China on Meta Phenoxy Benzaldehyde (MPBD) Imported from India

Imp- Changes in IEC with the introduction of GST

Constitution of GST Facilitation Cell in DGFT

Confirmation of GST Enrolment

GST: Final Transition Rules/ Approved Formats

Reminder - GST Enrolment by 15th June 2017/ Video Tutorials & Step by Step guide for GST Enrolment

GST- Addendum to GST Rate Schedule/ IGST Exemption List

News & Articles

Govt to review export target in trade policy rejig

PM Modi goes to Europe to initiate a new season of bilaterals

Ministry seeks to exit non-core areas

India starts dumping probe on chemical from Korea, Taiwan

GST: Exporters to get 90% duty refund within seven days

The art of the free trade agreement

Cabinet approves MoU between India and Korea for export credit of USD 9 billion

DGFT may come under Revenue dept.

Commerce Ministry sets up GST facilitation cell

Commerce Ministry sets up GST Facilitation Cell

Commerce Ministry engaging with stakeholders to resolve GST issues

Foreign Trade Policy review: Com Min likely to extend incentives for exporters

GST will help in e-commerce export, but clarity on policy needed: Stakeholders

Govt working on proposal to merge DGFT with CBEC

India slaps anti-dumping tariff on Taiwan's chemical firms

Trade policy eye on GST

After GST Facilitation Cell, DGFT comes up with Help Desk for GST issues related to FTP

The flip side of GST: its impact on the informal economy

India to sharply cut export target in mid-term review of Foreign Trade Policy

Ahead of GST, customs dept reworks systems

Incentive schemes for exporters to continue post GST: Commerce Secretary Rita Teaotia

In Modi, Trump has a partner who can make US-India relations a win-win

Adopting security measures will ease chemical exports: experts

PM Modi to visit Portugal, Netherlands, US beginning June 24

India allows select commodity export to Maldives

GST will boost purchasing power

BUSINESS WITH LATIN AMERICA - MEXICO HAS EMERGED AS THE TOP DESTINATION OF INDIA'S EXPORTS TO LATIN AMERICA


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