Status holders in global trade are the business leaders. These holders have successfully contributed to their nation’s foreign trade. The business leaders are expected to provide significantly in India’s exports. Thus, the status recognition is also based on export performance. Status-holder certificates are the keys to an exporter’s international trade advantages.
EPCG License and Status Holder certificate both come under the export promotion scheme of the Foreign Trade Policy. You can become a certificate holder by applying for a Status Holder Certificate (SHC). An exporter should obtain a specified minimum export for the certificate. The export performance of the current and previous 3 financial years will be considered. If your requested application is approved, you will be issued a SHC. As a leader, you must agree to guide the new entrepreneurs. This will strengthen India’s export-related commerce. The main aim of the Status Holder Certificate is to boost export performance.
The eligibility for the SHC recognition is declared by the Director General of Foreign Trade (DGFT). All the exporters of goods, services and technology having an (IMC) import-export code no. will be eligible for the certificate. For granting status, export performance is necessary for at least 2 out of 4 years.
Top 5 Advantages of Status Holder in International Trade
The Status holder certificates in global trade are key to advantages. A status holder is eligible for privileges specified by the Foreign Trade Policy. There are certain requirements for the exporters to avail of benefits under SHC. Here are the following requirements, mandated by the Directorate General of Foreign Trade:
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The exporter’s user profile must be linked with an IEC ( Import Export Code).
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A valid DSC (Digital Signature Certificate) must be registered in the system. You may verify the DSC from My Dashboard > View and Register Digital Signature Token.
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Turnover details of the company’s exports and imports must be entered and updated in the IEC profile.
The Status Holder certificate category is completely dependent on the export performance of the export house. An applicant shall be categorized as the status holder on achieving export performance during the current and previous 3 financial years. As for the Gems Jewelry sector, the current and previous 2 years shall be considered. The status categories are listed below:
Here are the benefits of having a Status Holder Certificate in international trade:
Standard Input-Output Norms (SION)
The status holder certificate has the privilege to get norms fixed. This would be done under an Advance Authorization/EPCG license within the 2 months of application. The status holder will be given priority by the norms committee. The special scheme concerning the input-output norms will be notified by the DGFT from time to time, for specified status holders.
Exemption From the Furnishing of( BG) Bank Guarantee
The status holder certificate, 100% exempts the exporter from the furnishing of the Bank Guarantee under the Advance/EPCG scheme. This would also exempt them from compulsory negotiation of documents through banks. Unless the documentation is specified anywhere in Foreign Trade Policy or HBP (Handbook of Protocol). Remittance, however, would be received through the banking channels.
Establishment of Export Warehouse
The Department of Revenue (DoR) specially permitted the export performers of 2 stars and above. This would provide them with the advantage of establishing export warehouses. The 3 stars and above export houses shall be entitled to benefit from the Accredited Clients Programme (ACP) as per the guidelines of the Central Board of Excise and Customs (CBEC).
Export of Free-of-Cost Samples
The star export houses shall be entitled to export freely exportable items. This excludes gems and jewellery, articles of gold and precious materials. The export can be on a cost basis for export promotion purposes. But, it is subject to the annual limit of Rs.10 lakhs or 2% of the average annual export realization during the preceding 3 licensing years.
For the export of Pharma products, the annual limit would be 2%. But, in the case of life-saving drugs and vaccines for international health programmes, the limit shall be up to 8% of the average annual export realization. Such free-of-cost exports shall not be entitled to any duty drawback under any export promotion scheme.
Self Certification
The export houses having 3 or above star status holders will be enabled to self-certify their manufactured goods. The manufactured goods, originating in India can be qualified for preferential treatment under:
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Preferential trading agreements (PTA),
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Free Trade Agreements (FTAs),
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Comprehensive Economic Cooperation Agreements (CECA)
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Comprehensive Economic Partnership Agreements (CEPA)
These holders are also directly entitled to the AEO (Authorized economic operator) benefits.
Conclusion
The Export house certificate holders are the Indian exporters having an excellent record of global trade. To become a government-certified status holder, the applicant must have a registered office with a valid IEC. The Status Holder Certificate or Export House Certificate are the key to the international trade advantage.
The validity of the status holder certificate is 5 Years from the date of its issue. The export houses should note that the certificate renewal shall be filed before the expiry of the existing validity period. If they apply for renewal before the expiry of the certificate. Then, the renewed certificate will have validity commencing from 1St April of the next licensing year. These status holders are entitled to the privileges specified by the Foreign Trade Policy. In the interest of trade facilitation and promotion of easy business, an electronic SHC is decided to be granted.