DGFT: Ease of export: DGFT simplifies composition fee under export advance authorisation

Amid a decline in India’s outbound shipments, the Directorate General of Foreign Trade (DGFT) on Wednesday simplified the process of levying composition fee on exporters to help achieve their export commitments.The fee is levied if the exporter is unable to timely export the product for which duty free import of inputs is made, called advance authorisation.As per the public notice issued by the DGFT, the composition fee has been capped between Rs 5,000-15,000 if the extension in the export obligation period for authorisations is less then half of the stipulated obligation period or is a one-time extension of six months.The fee has been fixed between Rs 10,000-30,000 for further extension.Earlier, the composite fee was calculated per month based on the unfulfilled free on board value.The commerce and industry ministry said the simplification of calculations for composition fee aids automation and faster service delivery by making the process more efficient and easier to understand.“This is an extremely pragmatic approach recognising the challenges faced by the Advance Authorisation holders in fulfilling their exports commitment owing to bonafide reasons due to global slowdown and supply disruptions. The reduction, capping and rationalisation of the composition fee will reduce the liquidity burden on the exporters and further facilitate exports as well,” said Ajay Sahai, director general, Federation of Indian Export Organisations.India’s merchandise trade deficit in December widened to $23.89 billion as against $21.1 billion a year ago as merchandise exports contracted 12.2% to $34.48 billion. Imports in December declined 3.46% on-year.The DGFT also said that in case of a ban or restriction on export of any product, the export obligation period in respect of Advance Authorisation issued prior to the restriction, would stand automatically extended for a period equivalent to the duration of ban, without any composition fee.ETRise MSME Day 2022 Mega Conclave with Industry Leaders. Watch Now.