Transport and Marketing Assistance (TMA) : An Incentive Scheme to Boost Agri-Exports

As a part of implementation action plan of Agriculture Export Policy, 2018, which the Union Cabinet chaired by Prime Minister Shri Narendra Modi has approved in December 2018, with an aim to double the shipments to $60 billion by 2022 and integrating Indian farmers and agricultural products to the global value chain, the government now announced the scheme for providing Financial Assistance for Transport and Marketing of Agriculture Products to boost Exports of such commodities to certain countries in Europe and North America.

There is a huge potential to increase agri-exports from India which need to be explored by providing proper financial incentives, lower cost of doing business and market support to boost exports. Indian agricultural/horticultural and processed foods are exported to more than 100 countries/regions; chief among them are the Middle East, Southeast Asia, SAARC countries, the EU and the US. However, till date, India’s agriculture exports were more opportunistic or accidental in nature without proper policy backup, which did not necessarily create additional value for farmers.

Now with the new policy measures proposed, it may instill new enthusiasm, and confidence to exporters as it is expected to provide stability in export policy by ending restrictions for exports, providing institutional ways for market access and bringing better predictability and give impetus for exports of agri and agri-based produces. Stable policy framework will allow all stakeholders to build business models with medium- to long-term plans, creating a strong USP for an India Agri-export Product which is crucial to success and to put firmly Indian agriculture produce on the global map.

The commerce ministry has laid out a detailed procedure for claiming benefits under the newly introduced Transport and Marketing Assistance (TMA) scheme, which aims at boosting agricultural exports. Under the TMA plan, the government will reimburse a certain portion of freight charges and provide assistance for marketing of agricultural produce.

> Under the scheme Financial Assistance shall be provided for transport and marketing of agriculture products to boost exports of such commodities to certain countries in Europe and North America.

> DGFT Notification No 58/2015-2020 published on 29 March 2019  regarding addition of a new chapter 7(A) added in FTP on Transport and Marketing assistance (TMA) for Specified Agricultural Products

> DGFT Public Notice No 82/2015-20 published on 29 March 2019 regarding procedure and ANF for availing Transport and Marketing Assistance (TMA) for Specified Agriculture Productions.

> Transport and Marketing Assistance (TMA) for export of Specified Agriculture Products to specified destinations would be available as per Department of Commerce’s Notification No. 17/3/2018-EP (Agri.IV) dated 27.2.2019

Transport and Marketing Assistance” (TMA) – Objective

> The “Transport and Marketing Assistance” (TMA) for specified agriculture products scheme aims to provide assistance for the international component of freight and marketing of agricultural produce which is likely to mitigate disadvantage of higher cost of transportation of export of specified agriculture products due to trans-shipment and to promote brand recognition for Indian agricultural products in the specified overseas markets.

Coverage of the Scheme

> All exporters, duly registered with relevant Export Promotion Council as per Foreign Trade Policy, of eligible agriculture products shall be covered under this scheme.

> The assistance, at notified rates, will be available for export of eligible agriculture products to the permissible countries, as specified from time to time.

Applicability of the Scheme: 

> The Scheme would be applicable for a period as specified from time to time.  Presently the Scheme would be available for exports effected from 1.3.2019 to 31.03.2020

Eligibility of Products:

> The assistance will be provided on export of all agriculture products covered in HSN chapter 1 to 24 including marine and plantation products except those mentioned in Annexure (1).

Pattern of Assistance

(a) Assistance under TMA would be provided in cash through direct bank transfer as part reimbursement of freight paid. FOB supplies where no freight is paid by Indian exporters are not covered under this scheme.

(b) The level of assistance would be different for different regions as notified from time to time for export of eligible products. List of export destinations/countries in each region eligible for assistance under TMA are mentioned in Annexure (2).

(c) The assistance shall be admissible only if payments for the exports are received in Free Foreign Exchange through normal banking channels.

(d) The scheme shall be admissible for the exports made through EDI ports only.

(e) The scheme covers freight and marketing assistance for export by air as well as by sea (both normal and reefer cargo).

(f) For export of products by sea, TMA will be based on the freight paid for a full Twenty-feet Equivalent Unit (TEU) containers. The assistance will not be available for (i) Less than Container Load (LCL) and (ii) a container having both eligible and ineligible category of cargo. Further, no TMA is available where the cargo is shipped in bulk/break bulk mode. A forty feet container will be treated as two TEUs.

(g) Assistance for products exported by air would be based on per ton freight charges on net weight of the export cargo, calculated on the full ton basis, ignoring any fraction thereof.

(h) The assistance will be provided at the rates as notified in Annexure 3.

Categories of Export Ineligible for TMA

 The following exports categories / sectors shall be ineligible under this scheme:

> Products exported from SEZs/ EOUs/ EHTPs/ STPs/ BTPs/ FTWZs

> SEZ/EOU/EHTPs/STPs/BTPs/FTWZs products exported through DTA units

> Export of imported goods covered under paragraph 2.46 of the FTP;

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

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

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

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

Procedure for Availing Assistance under the Scheme

> TMA would be reimbursed through the Regional Authorities of DGFT as per the procedure laid down in Chapter 7(A) of Handbook of Procedures (2015-2020).

> Mechanism for Scrutiny of the claims, audit, recovery and penal action.

> DGFT will lay down procedure for scrutiny of the claims, audit of the payments made, recovery of the ineligible/excess paid assistance, interest on such recoveries.  The defaulters shall be liable for penal action under the provisions of Foreign Trade (Development & Regulation) Act, 1992, Rules and orders made thereunder.

Procedure for Claiming TMA : Para 7(A).01 of HB

> Application by Registered Eligible Exporter having Valid RCMC from EPC

> Application to be Filled with RAs Headed Additional DGFT

> Application to be Filled Online on DGFT website : www.dgft.gov.in , on a Form ANF – 7(A)A with Application Fee

> Manually Submit to Concerned RA, Physical pdf Copy of Printout of Form ANF – 7(A)A along with prescribed documents within 30 Days

> Application shall be made on Quarterly basis

> Claim shall be made within one year from the completion of the quarter

> All claims for shipments made in a quarter shall be bunched together and submit a single application along with Chartered Accountant or Cost Accountant or Company Secretary Certificate.

Documents to Submit : Para 7(A).02 of HB

Along with Application in Form ANF – 7(A)A, following Documents should be attached

> EP Copy of Shipping Bill(s) / Airway Bills

> Commercial Invoices

> On Board Bill of Lading in case of Shipment by Sea

> Certificate of Chartered Accountant or Cost Accountant or Company Secretary Certificate in Annexure A to Form ANF – 7(A)A .

> Proof of Landing as per Annexure B to Form ANF – 7(A)A

Application Fee

> Public Notice No 02/2015-2020 dated 5 April 2019 notifies 1000 application fee for reimbursement of benefits under Transport and Marketing Assistance (TMA).

Other Conditions : Para 7(A).03 of HB

> The Assistance shall be paid only to the Exporter Exporting the cargo and in whose name Payment is realized in Free Foreign Exchange through Normal Banking Channels.

> FOB Supplies where No Freight is Paid by Indian Exporters are Not Covered in the Scheme

> The Scheme is Admissible for Exports made through EDI Ports only

> Claim should be made only for Full Container Loads (FCL) in case of shipments by Sea and in Multiples of Metric Tons (ignoring any fraction thereof)

> A Fourty Feet Container shall be treated as Two TEUs

> Less than Container Load (LCL) shipments and TEUs Containing both Eligible and In-eligible cargo shall not be Considered under the Scheme

> In case of Return of the Consignment by customer, the applicant who claimed the assistance should refund the amount along with Interest of 15%

Annexure (1) : List of agriculture products not eligible under TMA

Annexure (2) : List of Export destinations/countries in each region under TMA

Annexure (3) : Differential Rate of Assistance under TMA (Amount in Indian Rupees)

Disclaimer : The views and opinions; thoughts and assumptions; analysis and conclusions expressed in this article are those of the authors and do not necessarily reflect any legal standing.

Author : SN Panigrahi, GST & Foreign Trade Consultant, Practitioner, Corporate Trainer & Author.

Can be reached @ snpanigrahi1963@gmail.com