Background and Rationale

Foreign Trade Policy (FTP) 2023 is a dynamic framework that governs the import and export activities of India. In the latest revision, the Directorate General of Foreign Trade (DGFT) has amended Appendix 2K, which addresses the scale of user charges and the process for deposit and refund of application fees and penalties. This revision comes in light of operational changes that require the introduction of registration fees for various Import Monitoring Systems (SIMS, CIMS, NFMIMS, PIMS), which are crucial for tracking and regulating trade activities.

The amendment is part of the ongoing efforts by the Ministry of Commerce and Industry to streamline procedures, improve transparency, and enhance ease of doing business in India. The introduction of online payment systems and simplified refund processes aims to reduce administrative burdens on both the applicant and the government.

Detailed Comparison of Provisions

• Previous Provisions: Prior to the amendment, Appendix 2K outlined the fee structure for services like import/export licenses, authorizations, and other certifications. However, it did not incorporate fees for newer regulatory systems like SIMS or PIMS.
• Revised Provisions: The updated Appendix 2K now includes specific registration fees for various import monitoring systems. Additionally, there are changes to the fee structure for services such as Advance Authorization, DFIA, EPCG Authorizations, and SCOMET items.

Amendments and Their Implementation

The key amendments in Appendix 2K are as follows:

1. Introduction of Registration Fees:
Registration fees have been introduced for several Import Monitoring Systems (IMS) such as SIMS, CIMS, NFMIMS, and PIMS. These systems are integral to tracking imports and ensuring compliance with the trade policies. The fee structure is designed to be scalable based on the nature and size of the service being availed.

2. Updated Fee Structure:
A comprehensive fee structure for various services has been introduced, including fees for applications like:

• Importer Exporter Code (IEC)
• Export License/SCOMET items for restricted goods
• Advance Authorization (for MSMEs and Non-MSMEs)
• Duty Credit Scrips under rewards and incentive schemes
• Amendments and Corrections in licenses/scrips: The revised structure ensures that there are clear guidelines on the fee amounts based on the CIF (Cost, Insurance, Freight) value or duty saved amount.

3. Payment Process:

The amendment formalises the process for fee payments. Applicants will now make payments through the DGFT online platform. If direct online payment options are unavailable, the payment can be made through the e-Miscellaneous Payments System (eMPS).

4. Refund Policy:
The refund process has been streamlined. Refunds can now be processed in cases where:

• • The fee has been paid in excess of the specified amount.
  • No application was made after fee payment.
  • There was an error in fee payment but the applicant is exempt from payment of fee.

Refunds will be  subject to a time limit of one year from the payment date. The online refund process will auto-submit applications to the concerned authority.

5. Exemption from Payment:
No fee shall be payable in respect of any application made by such class or category of applicant as specified in Foreign Trade (Regulation) Rules,1993.

6. Revised policy condition for Coal IMS:

Registration Fee for obtaining Automatic Registration Number under Coal Import Monitoring System (CIMS) will be subject to the scale of fee mentioned in Appendix 2K.

Implications and Future Prospects

1. Impact on Businesses:
   The amendments will directly impact businesses by requiring them to pay registration fees for IMS and ensuring that all payments and refunds are handled through online channels. This will make the process more efficient but may also increase the administrative burden, particularly for small businesses.
2. Increased Regulatory Efficiency:
   The introduction of monitoring fees will enable the DGFT to invest in better technology and infrastructure for managing import/export activities. This is expected to lead to more accurate and timely regulation of trade activities.
3. Potential for Future Revisions:
   As trade dynamics change and more technologies are introduced, further amendments to the user fee structure and process are likely. The DGFT is expected to continue updating its policies to match the evolving needs of the industry.

Conclusion

The recent amendment to Appendix 2K of the Foreign Trade Policy 2023 marks a significant step in improving the fee structure and the efficiency of trade regulations in India. The introduction of registration fees for import monitoring systems and the streamlining of payment and refund procedures are intended to enhance the overall user experience. Businesses must be prepared for these changes, especially in terms of adopting online payment systems and managing refunds efficiently.