Amendments to Foreign Trade Policy 2015 2020 Extension of Integrated Good and Service Tax (IGST) and Compensation cess exemption under Advance Authorisation, EPCG and EOU scheme up to 30.06.2022.

## Report on Amendments to Foreign Trade Policy 2015-2020 **1. Executive Summary:** This report analyzes amendments to the Foreign Trade Policy (FTP) 2015-2020, as detailed in Notification No. 66/2015-20, dated April 1, 2022. This amendment extends the exemption from Integrated Goods and Services Tax (IGST) and Compensation Cess under the Advance Authorisation, Export Promotion Capital Goods (EPCG), and Export Oriented Units (EOU) schemes until June 30, 2022. The core purpose of this amendment is to provide continued relief from these taxes and levies to exporters operating under these schemes, potentially impacting their cost competitiveness. **2. Introduction:** This report provides an analysis of specific amendments to the Foreign Trade Policy (FTP) 2015-2020, as outlined in the provided government notification. The analysis focuses on the specific changes introduced and their likely implications, based solely on the information within the provided text. **3. Policy Overview:** * **Original Policy:** Foreign Trade Policy 2015-2020 * **Core Objective(s):** While the original FTP's overall objectives are not explicitly stated in the provided excerpt, it can be inferred that the original policy aimed to promote and regulate foreign trade. From the text, a specific objective related to the Advance Authorisation, EPCG and EOU schemes involves providing exemptions from Integrated Tax and Compensation Cess. **4. Background and Rationale:** * **Amendment Rationale:** The amendment extends existing exemptions, suggesting that the initial rationale for providing IGST and Compensation Cess exemptions under the Advance Authorisation, EPCG, and EOU schemes remains valid. The amendment likely aims to provide continued support to exporters by mitigating their tax burden, particularly given the specific extension date of June 30, 2022. It is possible there was a need to evaluate the effects of these exemptions or a delay in implementing a more permanent solution. **5. Key Provisions / Changes:** The amendment introduces the following key changes: * **Specific Policy Parts Changed:** The amendment directly modifies paragraphs 4.14, 5.01 a, and 6.01dii of the Foreign Trade Policy 2015-2020. * **New Rule/Provision:** The new provision extends the existing exemption from Integrated Tax and Compensation Cess under the following schemes: * Advance Authorisation (Para 4.14) * EPCG (Para 5.01 a) * EOU (Para 6.01dii) * **Difference/Effect of Change:** The key change is the extension of the exemption period *until June 30, 2022*. Without this amendment, the exemption would have expired before this date, increasing the tax burden on exporters using these schemes and potentially affecting their competitiveness. **6. Target Audience and Stakeholders:** Based on the provided text, the primary target audience and stakeholders directly affected by this amendment are: * Exporters utilizing the Advance Authorisation scheme. * Exporters utilizing the EPCG scheme. * Export Oriented Units (EOUs). These entities benefit directly from the continued exemption from IGST and Compensation Cess. **7. Implementation Aspects (Inferred):** * **Responsible Agency:** The Directorate General of Foreign Trade (DGFT), under the Ministry of Commerce and Industry, is the responsible agency, as indicated by the notification's origin and the signatory (Director General of Foreign Trade). * **Timelines:** The key timeline specified is the extension of the exemption *until June 30, 2022*. The original policy (FTP 2015-2020) would contain the procedures for claiming the exemptions under each scheme. This amendment likely requires the DGFT to communicate this extension to relevant customs and excise authorities for consistent implementation. **8. Expected Outcomes / Impact of Changes:** The likely intended outcome of these amendments is to: * Maintain the cost competitiveness of Indian exporters utilizing the Advance Authorisation, EPCG, and EOU schemes. * Provide continued financial relief to exporters by exempting them from IGST and Compensation Cess until June 30, 2022. * Prevent disruption to export activities that could arise from the sudden imposition of these taxes and levies. * Allow for review and possible further action on the exemptions before the new deadline. **9. Conclusion:** The amendments to the Foreign Trade Policy 2015-2020, detailed in Notification No. 66/2015-20, represent a targeted extension of IGST and Compensation Cess exemptions for key export promotion schemes. This extension, valid until June 30, 2022, is crucial for maintaining the competitiveness of Indian exporters and ensuring the continued smooth operation of export activities under the Advance Authorisation, EPCG, and EOU schemes. This amendment indicates the government's continued support for the export sector and its recognition of the financial implications of these taxes on export businesses.

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