Amnesty Scheme: Delivering exporters from choppy waters

The Amnesty Scheme under FTP 2023 allows all pending cases of default to be regularized by paying all customs duties that were exempted in proportion to unfulfilled Export Obligation. No interest is payable on the portion of Additional Customs Duty and Special Additional Customs Duty, providing relief to exporters burdened by high interest costs.

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Under the Foreign Trade Policy 2023, an Amnesty Scheme has been introduced to provide relief to struggling exporters who are burdened with compounded interest charges due to their failure to fulfil their obligations. This scheme aims to alleviate the financial burden faced by such exporters and help them restore their export benefits.

The scheme allows all pending cases of default to be regularized by paying all customs duties that were exempted in proportion to unfulfilled Export Obligation. Interest payable is capped at 100% of these exempted duties under the scheme. No interest is payable on the portion of Additional Customs Duty and Special Additional Customs Duty, providing relief to exporters burdened by high interest costs.

• Relief from interest liabilities: Under the amnesty scheme, exporters will be able to limit their interest liabilities on unpaid duties upon export default, providing them with some respite from compounded interest charges on customs duties over defaults in obligations.

• Waiver of compounded interest: The scheme proposes to waive the compounded interest payable on some of the unpaid duties, such as additional customs duty and special additional customs duty.
• Reduction in litigation: The amnesty scheme aims to reduce litigation by providing a special one-time opportunity for advance and export promotion capital goods authorization holders to address non-compliance in export obligations.
• Streamlining of export procedures: By reducing the burden of interest liabilities and litigation, the amnesty scheme will help to streamline export procedures and promote ease of doing business.
• Boost to exports: The scheme is expected to provide a boost to exports by making it easier for exporters to comply with their obligations and reducing the costs and complexities associated with exports. By reducing the financial burden and compliance costs, the amnesty scheme can enhance the competitiveness of the exporters, enabling them to focus on improving their products and services.

Procedure for Amnesty Scheme application

On April 17, DGFT notified the procedure for application to Amnesty Scheme for one-time settlement of default in export obligations by Advance and EPCG authorisation holders. The application will be filed online by logging on to the DGFT website and navigating to Services – Advance Authorisation/DFIA – Closure of Advance Authorisation (for AA) and Services – EPCG – Closure of EPCG (for EPCG).

The applicant then needs to click the checkbox for ‘Amnesty scheme for one-time settlement of default in export obligation’ and file application for closure against the concerned EPCG or AA authorisation.  Post that, basis their own calculations, they will provide details of the duty and interest values to be paid under Redemption matrix tab and submit the application online.

Post examination and confirmation by the RA, applicant can then make the required payment of duty and interest to the Jurisdictional Customs Authority and provide proof of payment in response to the said letter online. After verifying the evidence of payments and other relevant documents prescribed, concerned RA may consider granting Export Obligation Discharge Certificate online.

Earlier exporters used to confront struggles with defaults in fulfilling their export obligations and were facing compounded interest charges on duties. But, with this scheme exporters have support in facing financial difficulties and it is expected to encourage greater participation in India’s foreign trade.