ICEGATE Problems Hold Up Export Payments

Exporters are grappling with compliance and procedural challenges, as highlighted by recent issues involving the Directorate General of Foreign Trade (DGFT) and banking procedures.

A system-generated email from the DGFT has raised allegations of non-fulfillment of export obligations (EO) against numerous advance authorizations and EPCG authorizations issued between 2002 and 2007. Exporters assert that they have no pending EOs for these authorizations and point out the difficulty of retrieving records from 15-20 years ago. They contend that records are only required to be preserved for 2–3 years from the date of redemption.

Experts advise exporters to maintain compliance rigorously. Although records for such authorizations need not be preserved beyond 2–3 years, exporters should retain the Export Obligation Discharge Certificate (EODC) issued by the JDGFT. Exporters are urged to submit the EODC to the JDGFT and request the closure of these matters. Additionally, DGFT Trade Notice No. 1, dated April 6, 2023, mandates regional authorities to update EODCs in the online monitoring system for advance/EPCG authorizations. Exporters should verify their EODC status online and submit the details of redeemed authorizations to the JDGFT for updating, as many manually issued EODCs have not been updated in the system.

In another instance, exporters face issues with their banks regarding two shipments processed in Delhi. The shipping bills for these shipments are not reflected in the Export Data Processing and Monitoring System (EDPMS), causing the banks to withhold credit for payments received from customers. Customs officials have indicated that the problem lies with the ICEGATE system. Despite two weeks of communication with the ICEGATE helpdesk, no resolution has been found.

Other exporters report similar problems but note that their banks did not withhold their credits. It is recommended that affected exporters persist in following up with ICEGATE. Furthermore, they should escalate the issue to higher authorities within their banks, the Banking Ombudsman, or the Reserve Bank of India (RBI) if necessary.

Regarding compliance with recent DGFT notifications, exporters seek clarification on DGFT Trade Notice No.3 dated May 10, 2024, which specifies that Notification No.71 dated March 11, 2024, applies to advance authorizations issued after that date. Exporters can be exempted from Quality Control Orders (QCO) for imports under advance authorizations issued before that date, as per DGFT Policy Circular No. 40 dated February 2, 2001. The conditions prescribed in Notification No. 71 will not apply to such cases.

Exporters are encouraged to stay informed and proactive in addressing these regulatory and procedural challenges to ensure smooth business operations.

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