He added that NFE rules should be recalibrated to ensure manufacturing firms are not covered by these rules as long as they generate jobs and are also exporting.
Besides, a product manufactured in a country with whom India has a Free Trade Agreement will be tariff-free, while the same product made by another SEZ
will suffer full tariff. "We are urging the government that instead of giving zero tariff, it should levy tariff on the basis of the 'duty foregone' principle. Under this rule, only the imported components used in the manufacture of the product are charged tariff, not the local value addition that has happened in India," he added.
Total exports from Tamil Nadu
SEZs for the last financial year were close to Rs 1.10 trillion. The SEZs have already lost 15-20 per cent of this export value due to Covid-19 and it is estimated that the loss would be around Rs 8,000 crore per month. The service sector may be able to recover some of the loss, but for manufacturing, there might be a demand compression even after the facilities restart operations.
The current protocols are not conducive to social distancing and several hard copies related to transactions are required to be submitted. The Tamil Nadu
Association of SEZ
Infrastructure Developers (TASID) has urged the Central government to make the approval and compliance process 100 per cent digital, by integrating SEZ online with the national portal of Central Board of Indirect Taxes and Customs (CBIC).
The present system of SEZ online doesn't facilitate exports since DTA exporters supplying goods to SEZ Units are unable to get their export entitlements without having to go through a manual process. Payment of duty online should be made possible. Further, in case of excess payments of imports by a DTA importer, there is no system of refunds. Similarly, there is no system of collecting short duty amounts.
"We request that the approval and compliance process be made 100 per cent digital by integration of SEZ online with ICEGATE system. We request that this system be completed as soon as possible. This matter has been under review for several years withouu any resolution," said Rallan. Indian Customs Electronic Gateway (ICEGATE) is the national portal of Indian Customs of Central Board of Indirect Taxes and Customs (CBIC) that provides e-filing services to the Trade, Cargo Carriers and other Trading Partners electronically.