The DGFT is a facilitator & TCS the chosen implementer for the DGFT platform. TCS is a multi-billion-dollar company operating worldwide but it appears that while working with the Indian bureaucracy the best hit the bottom & bite the dust & this seems to be the case.

Granting status recognition should not require any application from the exporters for obvious reasons because the DGFT says that all their offices are computerized therefore with the help of the IEC number, the DGFT should be able to collate the Export & Import figures for a particular IEC through a software. There is no magic or rocket science involved in this. Alternatively, in 2000, there was a BIN number created in the Customs department for this specific purpose & as on date, the DGFT claims that there is seamless transmission between the Customs as well as the DGFT on real-time basis. Therefore, with all these tall claims, why the DGFT is not in a position to know what are the Exports & imports figures for a particular IEC. Finally, the moot point is that if the DGFT does not know all this then how reliable the trade statistics can be!

In this case study, we talk about status recognition. To my mind, this can be the simplest of application as it existed in the earlier version of the software run on the DGFT website. The exporter was simply required to fill in the Export figures of the last 3 Financial Years (policy periods) & the current year & claim double weightage if applicable in case of One star export House. The summation of this data will simply determine the eligibility of the Status certificate & there was no case of any problem as such. In this case, the application for the issue of the status certificate was made in the legacy system. There was no valid reported error in the application for not issuing the Status Certificate. However, the software implementer & the DGFT reportedly failed to transfer the application to the new DGFT platform. As a matter of fact, in any software development contract, it is one of the prime responsibilities of the service provider to upgrade & transfer the legacy data to the new software. I fail to understand that how TCS & DGFT could ignore this & make the life of the exporters miserable. As pointed out in my earlier article, the DGFT & all officials were touting the new revamped platform to be a great success in advance but when the implementation has failed miserably then there is no one to take the responsibility & rectify the same on urgent basis so that the exporters do not suffer in any case. In these circumstances, the DGFT officials advised to file a fresh application on the new revamped platform & this is where the nightmare started. I thought that it is a 15 minutes job to file a fresh application because simply four years FOB value of Exports were to be uploaded. To my utter surprise, when I uploaded the export figures, the total exports are in excess of 6 million Dollars (without the double weightage) but after uploading the data, there was a bizarre result thrown up saying that FOB value of exports cannot be negative & that you are not eligible for One star Export House certificate claimed by you. Now, any person with little common sense will understand that FOB value of exports cannot be negative if someone is trying to claim status. However, the stupidity has no limits in this world & this is one of the recent heights of stupidity encountered by me on a national level platform operated by the Director General of Foreign Trade (the appointed facilitator of the exporters by the Parliament) & TCS (one of the biggest software service provider in the world. It was not difficult to understand the glitch in the software. Since the exporter is a Small-Scale unit, the exporter is eligible for Double weightage. Now, software was doubling the turnover but assigning a negative value to it & then subtracting the FOB value of exports from it thus the end result was that the total FOB value of exports was appearing as negative in the final result. It is crystal clear that there is a software glitch & nobody in the DGFT as well as TCS seems to be even bothered? How can both these organizations be so plain negligent in their approach. I applied my mind & then tried to see if I can overcome the obstacle of negative FOB value by dropping the double weightage on account of Small-Scale Unit. However, once again to my utter surprise, once again the end result was a negative figure in the end result & the denial of eligibility followed as a consequence. If the DGFT & TCS could not manage such a simple task & that too when it existed in the legacy system then what have you to say on their competence! My comment is height of stupidity crossed all limits in software implementation & the highest award for incompetence goes to both TCS & DGFT.  This callous attitude in handling even the simplest of applications is the bane of the Indian bureaucracy & pulls down every exporter. It is also pertinent to point out that the manufacturer exporter is a status holder since 1999 till 31.3.2020 as per the extended policy provisions but then too the DGFT does not bother about such an exporter doing service to the nation! The small exporters get killed but it does not make any difference to these white elephants who seem incapable of doing anything right in the first instance. I have brought this to the attention of all concerned but there is not even an acknowledgement leave aside a reply. The point of law is that where is the responsibility & accountability in the system? The bureaucracy needs to understand that they are public servant & not British Lords of the yesteryears for sucking the blood of the common people.

I had earlier written about the complete mess in the issuance of the Certificate of Supplies from SEZ & it did not make any difference to the thick skinned DGFT & TCS officials. I think Mr. Rajesh Gopinathan, CEO TCS & Mr. N. Chandrasekharan, Chairman Tata Group were responsible & efficient but even after tweeting the despicable state of affairs to the attention of the both, there is no attempt to improve the position. Are they really no better than the Indian bureaucracy & only interested in money making at the cost of the exporters rather than doing some service to serve them in a manner befitting for an exporter, who are doing service to this nation!  If even the Tatas have given up business ethics then you have really hit the bottom from which it is impossible to rise. You can access the earlier article here.

The story of the incompetence of the DGFT & TCS does not end here. It extends to even pack of lies being advanced without any shame. It is really very disgusting that how DGFT & TCS can stoop so low! The point is that DGFT advised the exporters to register on the new platform & link their IEC & Digital Signature Certificate (DSC). The exporters completed the tasks as called for. The DSC remains valid but then too the exporter is not in a position to even modify the IEC because of the inefficiency of the DGFT. However, this case study is about an Advance Authorisation (AA), which has been issued with Co-licencee & used but wherein CIF value Enhancement has to be carried out. Now, the story of incompetence of DGFT & TCS unfolds once again i.e. the exporter is required to carry out the amendment of the AA before proceeding with the enhancement of the CIF value. However, the amendment is not being allowed on the DGFT platform saying that GST Number is not incorporated in the IEC of the Merchant exporter. The point of law is that when the AA is already issued & used, how can this restriction be imposed at this stage & what is the rationale of it? Why the DGFT/TCS did not ensure that the legacy data was updated so that the exporter did not face any problem. Why GST registration of Merchant exporter is essential for allowing Co-licencee in the AA. The Co-licencee is based on consent letter & the Co-licencee is the importer & utilizes the inputs in their manufacturing facility therefore it does not make any sense that the Merchant exporter should essentially have a GST registration. Finally, does it mean that if the Merchant Exporter does not have a GST registration then the Co-licencee facility cannot be allowed? Why DGFT should introduce such idiocies to harass the exporters to no end? Even in the Excise regime, there was no such restriction therefore why it is now introduced in GST regime without any rationale? Finally, I am trying to amend the IEC but then unable to do so because OTP is not received on the Mobile Number specified in the IEC. The complaint was registered on 1.4.21 but till 9.4.21, the same could not be resolved. However, there were calls from DGFT saying that the problem is resolved but that is a plain lie. I tried to call up the DGFT Mr. A. Yadav & Mr. A. Aggarwal, ADGFT, & left message to return the call or reply by e mail with the PS of both the officials but to no avail. How does the Cabinet secretary tolerate such kind of inefficient officials in the organization! In the private sector, pink slips would be given & such officials will be shown the door but in Indian bureaucracy it appears that people rise to their level of incompetence & such dead wood pulls down the whole nation. May be only the PM works in this nation therefore it is left to him to take appropriate action. There are too many mistakes to be ignored & buried under the carpet.

The DGFT & TCS combo allowed fresh login facility on the new platform & I had warned that time that this galaxy sized loophole will be exploited for criminal activity but nobody bothered then. Now that frauds have reportedly taken place in the transfer of the MEIS entitlements, the DGFT/TCS has abruptly reverted to the old database & created serious problems for the exporters. How can such adhocism be sanctioned & implemented by any organization without understanding the implications of such decisions. Can this approach be acceptable & tolerable at the national level in relation to the priority sector of exports! What does this mean for the nation & the exporters at large? Therefore, there is no dearth of idiocies & visible all around.

It has been specified time & again that there is no scope for idiocies by the DGFT/TCS authorities but then nobody seems to bother but the whole nation is paying the price of it & how long the Cabinet Secretary can continue with this is the moot question. If this was my conduct, my parents as well as my children would have bow down their heads in shame because such reprehensible behaviour is outrightly intolerable.


Author: Rajiv Gupta ([email protected])

Disclaimer: The contents of this article are for information purposes only and do not constitute an advice or a legal opinion and are personal views of the author. It is based upon relevant law and/or facts available at that point of time and prepared with due accuracy & reliability. Readers are requested to check and refer relevant provisions of statute, latest judicial pronouncements, circulars, clarifications etc before acting on the basis of the above write up.  The possibility of other views on the subject matter cannot be ruled out. By the use of the said information, you agree that Author / TaxGuru is not responsible or liable in any manner for the authenticity, accuracy, completeness, errors or any kind of omissions in this piece of information for any action taken thereof. This is not any kind of advertisement or solicitation of work by a professional.

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  1. Rajiv Gupta says:

    The amendment before proceeding with any request is because the DGFT officials did not carry out their responsinilties diligently. It was incumbent on DGFT/TCS to rectify any deficiency in the legacy data. DGFT/TCS cannot treat exporters as unpaid servants for cleaning the mess created by them.
    Further, no fresh restrictions can be made applicable while amending an authorisation. For e. g. AA to merchant exporter is issued with co-licencee then it cannot be that such sn AA cannot be issued without the GST number in the IEC database.
    The GST number of the Merchant Exporter has no implication on Co-licencee being specified in the AA.
    Finally, the policy does not stipulate that Merchant Exporter needs GST registration for having a co-licencee.
    The policy of Co-licencee is based on consent letter & that is sufficient.
    If ME does not have a GST then does it mean that you cannot have a Co-licencee in the AA. Why such idiocy be allowed to continue.

  2. Rajiv Gupta says:

    The second issue taken up is that on the revamped platform, DGFT allowed linking of IEC. The exporter complied & this should be respected. If not, DSC should be honoured.
    The old database, cannot be just used because the DGFT officials never put the application data on the website completely despite the exporter giving the complete data. This legacy data issue should have been attended by TCD or DGFT. The exporters cannot be put into serious difficulty for lapses by DGFT officials.

  3. Rajiv Gupta says:

    I finally got a call from Mr. Aggarwal, Addl. DGFT. He asked me to write 3 seperate mails about the issues & I did so.
    The 1st one about the issue of OTP on mobile. I gave several practical suggestions to solve the issue. One allow modification of IEC based on single verification through mail or mobile. Alternatively, allow modification based on DSC valid & linked to the IEC. The OTP I
    On phone is not getting delivered at all & even if you are seeking OTP for verification of phone, the OTP is coming on mail & not within 15 minutes validity period but after an hour or so. Therefore, it is for DGFT to take a practical view & resolve the issue.

  4. Rajiv Gupta says:

    Dear Mr. Hasmukh Patel,
    The FOB value is only taken into consideration in Status recognition & it is based on actual realization. There is no doubt about it. The point is that there can never be a negative value if someone is trying to claim status certificate because for status recogniy there will be a threshold & that will be substantial if three years base period & current year exports ate considered for recognition.
    I hope, you get the idiocy about negative value of exports due to softwareglitch.

  5. HASMUKH PATEL says:

    For status holder certificate, they calculate realization amount during the period(financial year), not export value. Due to this reason suppose it’s shown negative figure.

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April 2021