May 22, 2024

Everything to Know about Directorate General of Foreign Trade

What are the functions of DGFT?
1. Formulating and implementing foreign policies
Planning and announcing processes for exporters’ overseas trade is one of the DGFT’s main responsibilities. For exporters to conduct international business in the nation easily, straightforward and user-friendly procedures are developed.
2. Issuing IEC to exporters and importers
The DGFT assigns an importer or exporter an IEC, or import export code, which is a 10-digit corporate identity number. It is only given out based on a company’s PAN, or Permanent Account Number.
3. Maintaining the classification of the ITC-HS codes
The DGFT maintains the ITC HS code to help in improving the foreign trade policies (the Internationally Harmonized System of Coding). This code assists companies and business owners in deciding which specific product categories they want to market abroad.
4. Export licenses to items that are restricted
Exports of some goods from India are prohibited. An exporter must have an export license or authorization from DGFT in order to export items falling under this category.
Products that need DGFT licensing
  • 1. Woolen carpets that are handmade and coverings for floors
  • 2. Handicraft products
  • 3. Various dairy items, edible products of animal descent and honey
  • 4. Fruits and nuts that are edible and fruit peels
  • 5. Cereals
  • 6. Sugar products and confectionaries
  • 7. Organic chemicals
  • 8. Pharmaceuticals
  • 9. Fertilizers
  • 10. Tea, coffee and all spices
  • 11. Perfumes
  • 12. Essential oils
  • 13. Toiletries
  • 14. Silk and all its derivatives
  • 15. Cotton, jute
  • 16. Musical instruments
Schemes Issued by DGFT to representing exports
The Merchandise Exports from India Scheme (MEIS) programme seeks to compensate exporters in order to counteract inefficient infrastructure and related costs of exporting goods from India.

RoSCTL schem 

For integrated state and central taxes on clothing, the Rebate of State & Central Taxes and Levies (RoSCTL) programme serves as a rebate. Credit cards are employed as a customs duty payment method in this export incentive.

The Rebate of State & Central Taxes and Levies (RoSCTL) scheme acts as a rebate for embedded state and central taxes on garments. It is an export incentive where credit scrips are used for payment of customs duties.
The scheme of Service Export from India was established to promote the export of India’s officially recognised services. In accordance with this programme, exporters of certain services are given incentives ranging from 3% to 7% of net foreign exchange revenues.

RoDTEP scheme
The RoDTEP scheme was introduced by the government to offer incentives and tax benefits to Indian exporters. With the help of this programme, exporters can get back the tariffs and taxes they paid at the federal, state, and municipal levels.

Scheme of Advance Authorization
Raw materials can be imported by manufacturers tax-free to create export-quality goods under the Advance Authorization programme, a tariff exemption policy. For each individual product, DGFT has a cap on the maximum number of inputs that are permitted.

Authorization for duty-free import
This plan permits the duty-free importation of raw materials, fuel, energy sources, and oil needed to make export goods. DFIAs are only given out for specific products for which Standard Input Output Norms (SION) have been established.

Schemes of Deemed Exports
Merchandise made in India and shipped locally is regarded as export. The Deemed Exports scheme offers a number of discounts, including inputs free of duty and exemptions from taxes or levies paid in India, in an effort to support domestic industry in India

NIRVIK scheme
Under the Export Credit Guarantee Corporation of India’s (ECGC) Niryat Rin Vikas Yojana (NIRVIK) programme, insurance coverage is provided up to 90% of the total principal and interest. By making loans available to them and lowering their insurance premiums, this programme seeks to aid small exporters.
GST refunds
Exporters are eligible to request a refund of the GST paid on inputs because exports are classified as zero-rated supplies under the GST.

EOU scheme
The Export Oriented Units programme seeks to boost India’s exports and foreign exchange. Under this plan, exporters can even buy raw materials and capital products from domestic suppliers or through imports without having to pay a duty.
For transactions involving the DGFT website, such as IEC and other benefits, every Export-Import (EXIM) organization and company needs a digital signature certificate. The DSCs that have been registered on the DGFT website are recognized, making any documents that have been electronically signed equivalent to those that have been physically signed.

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