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Question: How we can invest in t Ventures (JV) abroad?

Investment in an overseas JV may be funded out of one or more of the following sources:

i) Drawal of foreign exchange from a bank in India;

ii) Capitalisation of exports;

iii) Swap of shares

iv) Proceeds of External Commercial Borrowings (ECBs) / Foreign Currency Convertible Bonds (FCCBs)

v) In exchange of ADRs/GDRs

vi) Balances held in EEFC account of the Indian party and

vii) Proceeds of foreign currency funds raised through ADR and GDR issues.

 





 

 

Question: What are the regulations governing a proprietorship company to make overseas investment?

Investments by established proprietorship or unregistered partnership exporter firms is allowed overseas subject to the following conditions:

i) The partnership and proprietorship firm is a DGFT recognised Star Export House.

ii) The bank is satisfied that the exporter is KYC (Know Your Customer) compliant and is engaged in the proposed business and meets the requirement as indicated in (i) above.

iii) Exporter has proven track record that is overdue exports do not exceed 10 per cent of the average export realization of proceeding three financial years.

iv) The exporter has not come under adverse notice of any Government agency like Directorate of Enforcement, CBI and does not appear in the exporters' caution list of the Reserve Bank or in the list of defaulters to the banking system in India.

v) The amount of investment outside India does not exceed 10 per cent of the average export realisation of the preceding three financial years or 200 per cent of the net owned funds of the firm, whichever is lower.

Question: We are a proprietorship firm which wants to set up wholly owned subsidiary abroad for expansion of our exports .What are the rules governing such investments?

Investments by established proprietorship or unregistered partnership exporter firms is permitted subject to the following conditions.

i) The Partnership / Proprietorship firm is a DGFT recognized Star Export House.

ii) The bank is satisfied that the exporter is KYC compliant and is engaged in the proposed business and meets the requirement as indicated at i) above.

iii) Exporter has proven track record i.e. overdue exports do not exceed 10 per cent of the average export realization of preceeding three financial years.

iv) The exporter has not come under adverse notice of any Government agency like Directorate of Enforcement, CBI and does not appear in the exporters' caution list of the Reserve Bank or in the list of defaulters to the banking system in India.

v) The amount of investment outside India does not exceed 10 per cent of the average export realization of the preceding three financial years or 200 per cent of the net owned funds of the firm, whichever is lower.

 

Question: What is the self certification process for pharma exports from India? Has it been postponed or is functional?

With effect from 15.05.2014, export of pharmaceuticals and drug consignment is permitted through a self-certification process.  In this process, the exporters is required to furnish a written declaration to the custom authorities at the time of export [as per Annexure given in  public notice 56 dated 1.4.2014] regarding compliance of the relevant provisions of bar-coding on secondary and tertiary level packaging on the consignment of pharmaceuticals and drugs being exported.




 

 

Question: We want to import food products for re-labellling and re-exports. Does the condition of 60%&& of shelf life will be applicable on such imports?

The condition of 60% shelf life stipulated under paragraph  13 of Chapter 1A (General notes regarding Import Policy) of ITC (HS) is not applicable to re-import for export purpose under paragraph  2.38 of Foreign Trade policy.  However, this will be subject to.

(i) Re-imported edible/food products to meet stipulated phyto-sanitary conditions.

(ii)  Importer gives an undertaking to Customs that re-imported the goods are not sold in the domestic market.

(iii) Importer submits a certificate to Customs that such goods have been re-exported.






 

 

Question: Is Special Additional Duty (SAD ) applicable on goods cleared from SEZ units to a unit in DTA?

Notification No. 45/2005-Customs, dated 16.05.2005 exempts from SAD goods cleared from SEZ / FTWZ and brought into DTA. The notification states that the exemption shall not be available if such goods, when sold in DTA, are exempt from payment of sales tax / VAT. Therefore, if Sales tax/VAT is applicable on such sale,SAD would be exempted.






 

 

Question: What is the graduation criterion under EU GSP regime?

There is an objective criterion of suspending tariff preferences (known as graduating out) under the EU GSP which is listed in Article 8 and Annex VI of the new regulation. For products other than textiles and clothing; a suspension of tariff preference for a product in case of a beneficiary occurs when the imports of that product from the beneficiary country exceeds 17.5% of the EU imports from all the GSP beneficiaries. However, for textiles and clothing, this threshold is fixed at 14.5% of EU imports from all the GSP beneficiaries. The data is the latest available for three consecutive years.







 

 

Question: What are the products on which India will no longer enjoy GSP benefits in 2014?

India will no longer be eligible for GSP benefits from 1.1.2014 to 31.12.2016 in respect of the following products: Mineral products, inorganic and organic products, chemicals other than organic and in-organics, raw hides & skin and leather, textiles, motor vehicle, bicycle, aircraft,  space craft, ships and boats.




 

 

Question: Whether Cess is imposed on rubber imports by the Rubber Board?

 

Cess on rubber is levied and collected as provided under Section 12 of the Rubber Act 1947. Under Sub Section (1), the said cess shall be levied en all rubber produced in India at such rate, not exceeding two rupees per kilogram of rubber so produced, as the Central Government may fix. In other words, under the Rubber Act, rubber produced in India alone attracts cess.

 








 

 

Question: Whether trading in commodity derivatives is speculation or business?

Under Section 43(5)"Speculative transaction means a transaction in which a contract for the purchase or sale of any commodity, including stocks and shares, is periodically or ultimately settled otherwise than by the actual delivery or transfer of the commodity or scrips" However, there are some exceptions to this section. Further, clause (e) of Section 43(5) was inserted by Finance Act, 2013 which reads as under:"an eligible transaction in respect of trading in commodity derivatives carried out in a recognised association shall not be deemed to be a speculative transaction." National Commodity and Derivatives Exchange Limited, Universal Commodity Exchange Limited, and Multi Commodity Exchange of India limited have been notified as recognised association. Therefore, trading (eligible transaction) in commodity derivatives on the aforesaid exchange will not fall under the definition of Speculative Transactions, instead it will be considered as Business Income/Loss. 

Question: We want to set us a unit in SEZ in Andhra Pradesh. Do we require prior clearance from environment authority?

It is a State matter. Generally, if any Industrial Estate/Complex/Special Economic Zones/Biotech Parks with homogeneous type of industries or those Industrial estates with pre -defined set of activities (not necessarily homogeneous), obtains prior environmental clearance, individual industries including proposed industrial housing within such estates /complexes will not be required to take prior environmental clearance, so long as the terms and conditions for the industrial estate/complex are complied with.




 

 

Question: What are the products allowed for border trade with Myanmar?

22 new commodities/items have been added by Public Notice 30 dated 16th Nov, 2012  to the existing list of 40 tradable items raising the number of total product to  62 for border trade between India and Myanmar. You can access the complete list in the above referred public notice at dgft.gov.in.Pl also see corrigendum issued through Public Notice No 27 dated 24th Sept., 2013.







 

 

Question: We are resident of Bangladesh and want to invest in Leather industry in India. Can we do it?

A non-resident entity can invest in India, subject to the FDI Policy except in those sectors/ activities which are prohibited. However, a citizen of Bangladesh or an entity incorporated in Bangladesh can invest only under the Government route. Thus you can very well but it will not be under automatic route but through Government route.

Question: What is requirement of wood packing for a handicraft product as our agents say that certain type of wood packing is only permitted?

As per requirement the export goods packed with raw or solid wood packaging material should comply with the International Standards for Phytosanitary Measures (ISPM No. 15) or are accompanied by a phytosanitary certificate with the treatment endorsed issued by the agencies which are accredited/certified by DAC. You may please see Customs Circular No. 13/2011 – Cus dated 28-02-2011 in this regard.

 

Question: What is the limit of remittance which can be sent from India for paying fee for a course in USA?

An Indian resident can make remittances for studies up to the estimates from the University/Institution abroad or USD 100,000, whichever is higher without any RBI approval. This limit is over and above the remittance limit of USD 75,000 which can be made under the Liberalised Remittance Scheme route for the same.

 

Question: We want to set up a t venture, for which agreement has been signed on 31st July 2013. Whether the new directions of 100%& of net worth of the company shall be applicable or the existing 400%& of net worth of the company shall apply in our case?

 

Since the Joint Venture was signed by you before the changes were  made by RBI on 14th August,2013  applicability of automatic route upto 400% of net worth of your company shall apply in your case and post facto reporting of such cases to RBI  by the bank.








 

 

Question: We are in trading business. Can we take credit of input or input services used exclusively in trading?

Trading is an exempted service. Hence the credit of any inputs or input services used exclusively in trading cannot be availed.

Question: Whether export of “Music Software is export of goods or services?

If the Music software is exported in Physical Form (CD), it will be treated as Physical Export Goods.  However, if the same is going in soft form, it would be treated as services Exports.

Question: What are the criteria to be adhered to avail the benefits of a group company?

Group company has been defined under paragraph 9.28 of the Foreign Trade Policy (FTP) as two or more enterprises which, directly or indirectly, are in a position to:-

(a)   exercise twenty-six per cent, or more of voting rights in other enterprise; or

(b)   appoint more than fifty percent, of members of board of directors in the other enterprise.

For group companies to claim benefits or have their exports counted for benefits to be claimed by another member of group, the group company should have been in existence at least 2 years prior to date of application under any of export promotion schemes notified in FTP.

 


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