Introduction
Dealing with government regulatory authorities can often prove to be a complex and frustrating experience, particularly for businesses and professionals striving to adhere to diverse regulations and secure licenses. Lately, concerns have arisen regarding the Directorate General of Foreign Trade (DGFT), Regional Authority (RA) in New Delhi. This authority has become embroiled in some controversial practices that are adversely affecting consultants and industries alike.
In this article, we will examine the challenges and issues surrounding DGFT, RA New Delhi, and examine the impact these issues have on businesses.
Unreasonable Condition: The EODC Dilemma
One of the most pressing concerns revolves around the DGFT’s requirement that all licenses with Export Obligation Discharge Certificate (EODC) issued must be updated on their BO portal. Failure to comply leads to the refusal of issuing Advance Authorisation (AA) or Export Promotion Capital Goods (EPCG) licenses. This practice seems unjustified and contradicts the documents outlined in FTP/HBP and ANF-4A/ANF-5A guidelines. It pertains neither to the issuance of fresh AA/EPCG authorizations nor is it constructive; instead, it amounts to harassment. However, DGFT is withholding the issuance of fresh AA/EPCG authorizations unless EODC records from previous AA/EPCG licenses are uploaded on the portal.
This requirement poses practical challenges for companies with an extensive operational history. Businesses established many years ago may find it nearly impossible to retrieve records dating back to their inception. Moreover, frequent changes in management and personnel further complicate the task of tracking and updating licenses.
Moreover, according to the Foreign Trade Policy (FTP), after obtaining EODCs, companies are only required to maintain records for a period of 2 years. Therefore, it is unreasonable to demand that a company established in 2002, whose license was closed in 2006, updates their records on the DGFT portal when they no longer possess such records.
Potential Resolution
A potential solution could involve allowing DGFT officers, who have access to these records, to carry out the necessary updates on behalf of the companies. This would ease the burden on businesses and professionals, expediting the licensing process and preventing unnecessary disruptions to business operations.
Since DGFT already possesses electronic records, requesting companies to update these records themselves seems unjustified. DGFT should take responsibility for updating the records, as all the necessary information is available in their software. Demanding records dating back 10 or 15 years from companies is unreasonable when such records no longer exist.
Issues with Deficiency Memos
The practice of issuing multiple deficiency memos for a single file poses a significant concern. This leads to unnecessary delays in the processing of applications. Even when timely responses are provided to deficiencies, officers continue to raise the same issues, contributing to a backlog and negatively affecting industries.
For example, if an AA/EPCG file is submitted, the first deficiency is issued by one department, followed by another from FTDO, then another from JTDGFT, and so on. This practice of repeatedly issuing deficiencies for minor matters related to obtaining AA/EPCG licenses should be addressed internally within DGFT, RA, New Delhi, to streamline the process. In many cases, normal requests for AA/EPCG issuance are taking longer than 1-2 months.
Trade Notice and Communication Challenges
Limited Officer Meetings: The DGFT, RA, New Delhi, in conjunction with some other RAs, issued a trade notice that restricts consultants and industries from meeting with officers. Although the notice suggests that meetings are allowed in exceptional circumstances, the reality paints a different picture. Many requests for appointments remain unanswered, and it appears that the authorities are not effectively facilitating communication. Despite our efforts to communicate with ADGFT and other DGFT officers via email, we have received no response. This communication gap leads to misunderstandings between the industry and the department. DGFT has its own basis for understanding cases, which results in the delayed processing of files. The lack of communication with consultants or industries leads to pending files, impeding business operations, as various licenses issued by DGFT are crucial for daily industry functioning.
The Importance of Meetings: Meetings play a crucial role in resolving complex issues, especially concerning advance, EPCG, and other matters. Consultants often need to clarify the intricacies of their cases, but the lack of access to officers makes it increasingly difficult to find solutions.
Daily VC Meetings
The introduction of daily video conferencing (VC) meetings from 10:30 AM to 11:30 AM is a positive step for obtaining updates regarding the applications one has submitted. However, in most cases, senior-level officers are absent, with only their names appearing in the meetings. Junior-level staff often lack information about the matter and only take file numbers, promising to share concerns with the respective team. Unfortunately, this frequently results in no action being taken, causing significant losses for industries due to the inaction of officers within DGFT.
Impact on Industries
The challenges highlighted above exert a significant impact on industries. The delayed approvals and bureaucratic hurdles result in disruptions to their operations, causing a ripple effect throughout their supply chains and financial stability. These issues hinder the ease of doing business and stifle the growth potential of industries.
Conclusion
The issues outlined in this article shed light on the challenges faced by consultants and industries when dealing with DGFT, RA, New Delhi. There is a need for increased accountability among top-ranking officers at DGFT to address the unnecessary issuance of deficiencies and streamline the application process. These issues have a profound impact on industries and necessitate a more efficient and responsive approach from the authorities. These issues not only affect businesses but also hinder the government’s commitment to improving the ease of doing business, as promised by honorable minister Mr. Piyush Goyal, who pledged to streamline the issuance of AA and EPCG licenses within one day.
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Disclaimer: The article titled “DGFT, RA New Delhi: Challenges & Impact on Businesses” is intended for informational purposes only. It does not constitute professional, legal, or financial advice. The content may not be accurate, complete, or up to date, and readers should seek expert guidance and conduct independent research before making decisions or taking actions based on the information provided. TaxGuru.in and the authors do not endorse any specific entities mentioned in the article, and any reliance on the content is at the reader’s own risk. Tax laws change, and individual circumstances vary, so it is essential to consult with professionals for personalized advice. TaxGuru.in and its authors are not responsible for any loss or damage resulting from the use of the information in the article.
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