FinMin Expands Export Incentive Programs for Exports by Courier | Economic and Political News

3 minutes of reading Last update: Sep 13, 2024 | 21:32 IST

The Union Finance Ministry on Friday extended export benefits, including duty drawback, remission of duties or taxes on exported products (RoDTEP) and refund of state and central taxes and levies on export of goods (RoSCTL), to exports made through courier companies.

The Central Board of Indirect Taxes and Customs (CBIC) in the Department of Revenue, Ministry of Finance (MoF), in its circular, stated, “Import and export courier consignments are handled on Express Cargo Clearance System (ECCS) for clearance at notified International Courier Terminals (ICT). Due to inherent limitations of the system architecture, it was not possible to process certain export related payments (i.e. Duty Drawback, RoDTEP and RoSCTL) in ECCS. Hence, it was decided to use Indian Customs EDI System (ICES) at International Courier Terminals for processing the above payments as ICES has required facilities like rollover generation and integration with PFMS.”

Earlier, restrictions under the Express Cargo Clearance System (ECCS) prevented exporters from claiming benefits such as duty drawback, RoDTEP and RoSCTL scheme for courier exports.

“This change allows companies to use courier services for imports and exports related to these schemes, offering greater flexibility and efficiency in supply chains. Earlier, courier services were restricted to the EOU scheme. The updated regulations include revised procedures to accommodate these additional export promotion schemes,” said Saurabh Agarwal, Partner, Tax, EY.

According to a press release by the Ministry of Finance, the objective of this move is to ensure a level playing field and an enabling environment for inclusive and harmonious growth of exports through courier services and enhance the competitiveness of SME exporters.

“This initiative is expected to significantly boost courier exports and strengthen India’s position in the era of growing global e-commerce sector,” the press release said.

The e-commerce industry in India has witnessed exponential growth over the last decade and is expected to witness a rapid growth in revenue in the coming years. According to estimates, e-commerce exports from India are likely to grow to $400 billion by 2030.

In terms of courier exports, in fiscal 2022-23, the total courier exports stood at Rs 7,995 crore and e-commerce exports stood at Rs 3,510 crore. These numbers are expected to increase significantly, given the global trends and the impetus given to the e-commerce industry through various government initiatives.

This hurdle was overcome with the decision to leverage the Indian Customs EDI System (ICES) in International Courier Terminals (ICT). ICES offers essential features like scroll generation and integration with Public Financial Management System (PFMS) to seamlessly process export-related payments.

Authorised couriers seeking Duty Drawback, RoDTEP or RoSCTL benefits will now submit their shipping bills to ICES using their existing courier registration. ICT enabled custodians will register with ICES to handle the registration of export goods and exchange relevant messages. Goods will be physically handled and examined at ICT while customs clearance will be processed electronically via ICES.

First published: Sep 13, 2024 | 21:32 IST