A number of new policy measures have been formulated in the new trade policy. To reduce the cost of manufacturing and to make our exports more competitive, the decision that plant, machinery and equipment to be imported to set up a unit in DTRE scheme will be exempt from duty and taxes is laudable.
Another good step is allowing of imports from India, even if the inputs are not included in the importable items from India, or manufactured locally. The government will also provide complete zero rating to exports by refunding of indirect taxes on input cost incurred on the manufacturing of merchandise, which is exported.
Initially in order to encourage export of value added products and in particular those products manufactured by SMEs, it has been decided to increase the drawback rate by 1 percent of FOB value on this account for 14 products. All schemes of zero-rated imports for export sector, like DTRE and temporary importation schemes (SRO-1065), have excessive documentation, which have irritated traders in the past.
In order to facilitate the exports, the government has decided to introduce a new scheme, whereby a notified percentage of inputs may be allowed to be imported at zero duties against FoB value of exports with flexibility to import any product among the notified list in any quantity within the overall entitlement of the exporter.