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Exim Policy has nothing for IT

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DQW Bureau
New Update

India has kept its tryst with destiny to

join the new league by removing QRs for the remaining 715 items bidding goodbye

to the balance of the quota Raj. Domestic market has been opened to all kinds of

imported consumer goods, ranging from cheese to perfumes to the finest wines and

snazziest cars.

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The opening up is certainly at a price as

the import duties have been fixed at pretty high levels for the protection of

domestic industry. Murasoli Maran, Minister for Commerce and Industry, has

expressed his satisfaction on the export front complimenting both the industry

and conducive environment created by the Government.

However, the IT industry finds itself at a

loose end as it barely gets a mention in the policy. The important changes

relating to IT are as under.

  1. The

    export obligation on setting up of Software Technology Parks (STPs) has been

    reduced with reduction in net foreign exchange earning as a percentage of

    exports from 20 to 10 percent. The minimum export obligation would now

    be--"$ 0.25 million or three times the CIF value of imported capital

    goods, whichever is higher" down from "$ 0.25 million or five

    times the CIF value of imported capital goods, whichever is higher."

  2. There

    is no change in the requirement for custom bonding by STPI units. The

    requirement of custom bonding continues for STPI units and the industry

    demand for dispensing the same has not been accepted.

  3. Export

    Promotion Capital Goods (EPCG) scheme for the software industry remains

    unaltered. Capital equipment can be imported by the software industry on

    payment of five percent duty against an export obligation equivalent to five

    times the CIF value of capital goods on FOB basis or four times the CIF

    value of capital goods on NFE basis to be fulfilled over a period of eight

    years reckoned from the date of issuance of the license.

  4. The

    Special Import License (SIL) scheme as an incentive to exporters has been

    completely dismantled as announced in the Exim policy last year. SIL has

    become irrelevant as all items have been shifted to the free list of imports

    and there is no need for a license to import them any more.

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The Minister also announced that the

Government has decided on extending time till March 31, 2002 for meeting export

obligations under the EPCG scheme for licenses issued during

1990-96 upon execution of bank guarantee

with the licensing authority. This has been done to regularize default on late

completion of obligations and also to allow one-year time till March 31, 2002

for meeting the export obligation. Formal notification in this regard is

expected to be issued soon.

Mohan Khanna GM, Zensar Technologies Ltd

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