CA Sudhir V S &
CMA Srikanth Manne

Introduction

In order to boost the economy and promote exports from India, there has been various schemes notified under Foreign Trade Policy (2015-20) (hereinafter referred to as “FTP”) giving the incentive to the exporters to make the Indian products price competitive in the international markets. Further it is also clear that the taxes should not be exported as per the international norms and hence the benefits under FTP.

Out of many benefits provided one such benefit is Transport and Marketing Assistance for Specified Agriculture Products (hereinafter referred as “TMA” or “Scheme”) has been notified under Chapter 7(A) of Foreign Trade Policy (2015-20) (hereinafter referred to as FTP), to aid with the international component of freight and marketing of agricultural produce, vide Notification No.58/2015-2020 Dated 29.03.2019, DOC Gazette Notification F.No.17/3/2018-EP(Agri.IV) dated 27.02.2019 & Public Notice No.82/2015-2020 Dated 29.03.2019.

Objective of TMA

To promote brand recognition for Indian agricultural products in the specified overseas markets and to reduce the higher cost of transportation due to trans-shipment of export of specified agriculture products.

Applicability

TMA Scheme would be available for exports made during 01.03.2019 to 31.03.2021 (after being extended by 1 year vide Public Notice No.67/2015-2020 Dated 31.03.2020) by exporters duly registered with relevant Export Promotion Council as per FTP, to the export destinations listed under TMA.

TMA Assistance in cash transfer

Para 7(A).03 provides the benefit through bank transfer of freight incidence on exports by Indian exporters at rates notified in Annexure-3. It is to be noted that the rates are specified in INR per TEU (20 feet equivalent unit container) or per Tonne/KG and the refund will be eligible only to the extent notified irrespective of the actual spent.

The cash transfer would be as follows based on the various regions to which the export has been made. It is to be noted that vide DOC Notification No.17/3/2018-EP(Agri IV) Dated 27.04.2020 and Public Notice No.05/2015-2020 Dated 12.05.2020 the export to East Africa would be eligible only w.e.f. 28th April 2020. Further the said notification also notified air freight cash transfer rates per kilo gram basis, which was earlier in tonnes.

(Amount in INR)

Region Amount Per TEU (Normal) Amount Per TEU (Reefer) By Air Amount per Kilogram
West Africa 11,200 19,600 0.84
East Africa 11,200 21,000 0.84
EU 9,800 21,000 1.12
Gulf 8,400 14,000 0.70
North America 21,000 28,700 2.80
ASEAN 5,600 12,600 0.70
Russia & CIS 12,600 22,400 0.70
Far East 8,400 12,250 0.84
Oceana 16,800 24,500 2.80
China 0 12,600 0.84
South America 23,800 31,500 3.50

Reefer means refrigerated cargo

The above incentive would be provided only for the full container, that mean to say of the export do not make the full container, then incentive would not be eligible. Further in case of air export the fraction of tonne or kgs as the case may be would be ignored.

Eligibility for Assistance under TMA

Incentive under TMA will be provided on export of all agriculture products covered in HSN chapter 1 to 24 including marine and plantation products. There are certain products, when exported would not be eligible for this scheme such as Live animals, Milk products, onions, wheat, rice, beverages etc. which has been listed in Annexure I of DOC Notification F.No.17/3/ 2018-EP(Agri.IV) dated 27.02.2019 & Public Notice No.82/2015-2020 Dated 29.03.2019.

Ineligible export categories under TMA Scheme

i. Products manufactured/procured by an Special Economic Zones/Export Oriented Units/Electronic Hardware Technology Parks/Software Technology Parks/Bio-Technology Parks/Free Trade and Warehousing Zones and exported through DTA units;

ii. Export of imported goods covered under paragraph 2.46 of the FTP such as ammunition, rifle catridges, etc. to be done under authorization by Licensed/Authorised Arms Dealers;

iii. Exports through trans-shipment i.e. exports that are originating in third country but trans-shipped through India;

iv. Items, which are restricted or prohibited for export under Schedule-2 of Export Policy in ITC (HS), unless specifically notified;

v. Export products which are subject to Minimum Export Price or export duty, unless specifically notified;

vi. Export of goods through courier or foreign post offices using e-Commerce.

Conditions and restrictions for availing assistance under TMA

i. The scheme shall be admissible only for export of Full Container Loads (FCLs) only.

ii. Incentive would be available only for the exports made to the regions listed in Annexure (2) of DOC Notification F.No.17/3/ 2018-EP(Agri.IV) dated 27.02.2019 & Public Notice No.82/2015-2020 Dated 29.03.2019;

iii. The scheme shall be admissible only for the exports made through EDI ports.

iv. The assistance shall be admissible only if export proceeds are received in Free Foreign Exchange through normal banking channels.

v. Incentive would be inadmissible on the FOB supplies. Payment of freight by the exporter is required to be eligible for the incentive.

vi. Assistance would not be available for the products listed in Annexure (1) of DOC’s Notification F.No.17/3/ 2018-EP(Agri.IV) dated 27.02.2019 & Public Notice No.82/2015-2020 Dated 29.03.2019;

vii. The assistance will not be available for

a. Container having both eligible and ineligible category

b. Cargo shipped in bulk/break bulk mode

Submission of application

A. Online

i. To avail assistance under TMA, an Application, in Aayat Niryat Form 7(A)A, has to be filed along with supporting documents as specified in Para 7(A).02 which is discussed under.

B. Manual Submission of Physical Copy of application within time

i. After electronically submission of claim, physical copy of the application & its supporting documents shall be filed manually with Regional Authority Concerned within 30 days;

ii. Non-submission of physical copy within time limit shall be treated as non-acceptance of application by DGFT & it shall be liable to reject.

iii. Following are the self-certified copies to be submitted along with the application –

a. EP copy of Shipping bills/Airway bills;

b. Commercial Invoice;

c. On board Bill of Lading for shipment by sea;

d. Certificate from CA/CMA/CS in Annexure-A of the Form;

e. Proof of landing as per Annexure-B;

Due date for submission of physical copies for all applications filed during 01.02.2020 to 30.09.2020 would be 30th October 2020 (extended by Public Notice No.02/2015-2020 Dt.13.04.2020)

Due date for filing of claim under TMA

Claim for assistance under TMA should be filed on quarterly basis within a period of one year from completion of the respective quarter. However, for the month of March 2019 and quarter ended June 2019 the due date would be 30th of September 2020 (Extended vide Public Notice No.02/2015-2020 Dated 13.04.2020)

Late Cut not allowed

Para 9.02 & 9.03 of Handbook of Procedure of the Foreign Trade Policy allows delay claim with a certain late cut in the incentive for some specified scheme. However, the provisions of late cut/supplementary claims are not applicable for this TMA scheme.

Scrutiny of the claims, audit, recovery and penal action

The erroneous(ineligible/excess) claims shall be liable for recovery along with interest as well as penal action under the provisions of Foreign Trade (Development & Regulation) Act, 1992.

Conclusion: This scheme is in addition to various other schemes of Foreign Trade Policy such as MEIS, DBK etc. Although this may not be a substantial benefit, since the procedure is simple this could be applied to claim that additional incentive at this difficult time. Documentation would be the key factor to the smooth receipt of money.

(For any queries/feedback please write to us – sudhir@hiregange.com, srikanth@hiregange.com)

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