with Post-Audit has been described in Section III as an
essential simplification of procedures. Instead of
sitting in judgement over every action before it is
committed, thereby acting as a serious impedance to the
velocity of business, it stands to enlightened
commonsense that entrepreneurs should proactively
implement their projects as fast as they physically can
and stand to scrutiny only after things are implemented.
If they have committed any illegal act, then, they should
be subject to strong punitive measures, unless it is
proved that these were committed in good faith and
without causing any pecuniary loss to the Government or
trespassed on the rights of other citizens. If less than
10 percent of the actions are so punishable, then the
country gains by allowing more than 90 percent of the
actions to proceed un-impeded. In this spirit, the
following further procedural simplifications are
suggested for which the Task Force on IT Hardware Panel
may suggest an optimal set of such measures.
- Licensing of
capacities and production within S-BIT zone or in
the S-BIT units shall be totally eliminated as
has been done in the DTA. Even if total
broadbanding poses administrative difficulties, a
maximal set of sector-specific broadbanding
should be permitted, e.g., computer hardware,
peripherals, data communication, etc.
- Where licences
are issued, they shall be on a generic basis
without insisting on the part numbers, technical
description of every component, etc.
purchase capital goods as well as loan them from
their clients. For purchase of goods, the initial
bonding will be for a period of five years and
for loan, a further extension of two years.
- In the
Handbook of Procedures Volume I, para 9.7,
requires the list of CG attestation by the
Development Commissioner before actual import.
Instead, this should be allowed without
attestation, but based on original OOA subject to
total value limits approved.
- The Customs
Notification No. 133/94 dated 22-6-94, Para 6,
should be amended to remove "such conditions
and limitations as may be imposed by him"
with respect to (i) re-export permission, (ii)
returns and (iii) inter-unit/inter-zone transfer.
- With respect
to CT-3 permission, bond should be dispensed with
in view of "simple bond systems" for
EPU/EPZ introduced by CBEC and make applicable to
S-BIT units/zones also.
- GR Waiver
authority shall be with the Development
Commissioner under the 'Single Window concept'
instead or the Reserve Bank of India.
'OFFSET' of receivables against the payables
shall be allowed without the need to seek
permission of the Reserve Bank of India.
- Where the
concept of S-BIT units are extended to the
formation of S-BIT zones, the Development
Commissioners of the Zones who are the
administrative officers responsible for the
day-to-day operation of the units, shall be
entrusted with the powers of the customs under
Section 6 of the Customs Act so that multiplicity
of agencies involved in import, export and other
custom transactions can be avoided.
amendments in Chapter 10 of EXIM Policy shall be
brought about in respect of materials cleared
against form AR-3A through factory supply to
EOUs/Units in EPZs and their extended
applicability to S-BIT units/units in SBIT zone
from such Depots of companies against Form CT-3.
This is essential to meet the velocity of
business required for 'just-in-time' delivery
required by the customers. Further as the Depots
are now accepted as extensions of the factories
as far as the definition of 'place of removal' is
concerned under the amended Section 4 of the
Central Excise Act, removal of goods from the
Depots against Form CT-3 shall be allowed.
- As problems
may be caused in getting permission in the
absence of input/output norms and as customs in
the zones often confess to not having expertise
to fix these norms, it is pragmatic to dispense
with the condition of input/output norms
altogether from the EXIM Policy.
- Labour Laws:
IT product Industry, by its very nature, depends
heavily on the women work force. As this is one
of the best and lucrative areas for large scale
employment of women and in order to protect the
employment prospects of women workers, Labour
Laws have to be amended to meet the essential
requirements implied by the highly competitive IT
products industry. As the Indian IT product
industry will increasingly have to compete with
countries like Taiwan, Singapore, Korea and
Philippines, the Indian Labour Laws in this
limited sector should not be adverse as compared
to the Labour Laws in the competing countries.
Similar observations apply also to male workers.
In view of this, the following modifications in
the Labour Law specifically applicable to the IT
Hardware manufacturing sector, shall be enacted
with full consideration of the ILO
- Women shall be allowed to work
in three shifts subject to provisions of all the
ILO specified conveniences including
transportation from and to the door steps of the
- Temporary status shall apply
for 720 days out of the 3 years instead of 240
days out of one year.
- Flexibility to retrench the
labour force, in the face of justifiable causes
arisen from market forces, upon payment of
appropriate compensation fully in line with the
ILO specified norms.
- Flexibility to operate 10 hour
shifts without over time subject to overall
limit, compensatory leave and other 120 specified
- In a fast
obsolescent industry characterised by sudden
changes in crises as well as in relative
competitive positions, speed is the name of the
game. Accordingly, a number of associated
procedural modifications are necessary to achieve
a high velocity of business:
- For 90 percent of the import
clearances, physical presence of Customs
Officials is not necessary.
- Monopoly in Cargo handling
shall be removed.
- Raise the limit on invoice
through bank from the current US $ 25,000 to US $
one million for imports.
- Requirements of 'country of
origin' in LC shall be abolished.
- No permission shall be
required for export of samples.
- Replacing of return goods
shall be made only through self-assessment.
- All surplus items can be
disposed on payment of full duty without
- Cargo handling agency should
be held responsible for clearing the consignments
within 24 hours of landing. Punitive measures and
fines shall be imposed in cases of delay.
- The Freight
Forwarders/Clearing Agents shall be allowed space
within the Cargo terminals in a bonded area to
allow for the freight consolidation of export.
- Customs shall function for 24
hours a day and 365 days a year without break.
- There should be no cooling off
- All returns from Customers
shall be on the basis of self-declaration only.