All the exporters seeking benefits under the Interest Equalisation Scheme w.e.f 01.05.2023 are required to submit an Acknowledgement consisting of UIN which would be associated with a particular bank only for a ONE-TIME disbursement. The beneficiaries of this scheme are directed to submit a new UIN for each disbursement to the concerned bank. This also applies where the credit is rolled over, and a new UIN shall be generated by the exporter for each rollover.

Key Aspects of the New Trade Notice

Introduction of Unique Identification Number (UIN):
Effective from May 1, 2023, all exporters looking to benefit from the Interest Equalisation Scheme are required to submit an Acknowledgement consisting of a UIN. This UIN will be linked to a specific bank for a one-time disbursement. The introduction of this unique identifier aims to enhance the efficiency and transparency of the disbursement process under the IES.

One-Time Disbursement Rule:
The new regulation stipulates that each disbursement under the IES will be associated with a unique UIN that is valid only for that particular transaction. This means that for each new disbursement, exporters will need to obtain and submit a new UIN to the concerned bank. This procedure ensures that each disbursement is accurately tracked and processed.

Applicability to Credit Rollovers:
The requirement of submitting a new UIN also applies in cases where the credit under the IES is rolled over. Exporters must generate and submit a fresh UIN for each rollover instance. This measure ensures that even when credit is extended or renewed, the process remains transparent and traceable.

Implications for Exporters

Enhanced Compliance:
Exporters must adapt to this new requirement to ensure compliance with the updated regulations. The need to submit a new UIN for each disbursement and rollover will require exporters to maintain accurate records and manage UIN generation effectively.

Process Adjustments:
Businesses involved in international trade will need to adjust their internal processes to accommodate the new UIN requirement. This may involve revising procedures for generating and managing UINs, as well as updating documentation practices to ensure seamless integration with the IES.

Increased Transparency:
The introduction of UINs aims to increase transparency in the disbursement process under the IES. By linking each disbursement to a unique identifier, the scheme enhances the traceability and accountability of transactions, benefiting both exporters and regulatory authorities.

Potential for Administrative Changes:
Exporters should be prepared for potential administrative changes related to the submission of UINs. This includes updating internal systems to accommodate the new requirement and ensuring that all relevant staff are trained to handle the UIN process efficiently.

Action Steps for Exporters

Understand the UIN Process:
Exporters should thoroughly understand the process of obtaining and submitting UINs. This involves familiarizing themselves with the procedures for generating UINs, submitting them to banks, and ensuring compliance with the new regulations.

Update Internal Procedures:
Revise internal procedures to incorporate the UIN requirement. This may involve implementing new protocols for UIN management, updating documentation practices, and ensuring that all disbursements and rollovers are processed with the appropriate UINs.

Communicate with Banks:
Engage with the concerned banks to understand their specific requirements related to UIN submission. Clear communication will help in aligning processes and ensuring smooth handling of disbursements under the IES.

Seek Guidance if Needed:
If there are uncertainties or questions about the new UIN requirement, exporters should seek guidance from trade experts or regulatory advisors. Professional advice can provide clarity and help navigate the new compliance landscape effectively.

Conclusion

The latest Trade Notice from the Ministry of Commerce & Industry, Department of Commerce – International Trade, introduces important changes to the Interest Equalisation Scheme, with the implementation of unique Identification Numbers for disbursements and credit rollovers. By understanding and adapting to these new requirements, exporters can ensure compliance, enhance transparency, and streamline their processes under the IES. Staying informed and making the necessary adjustments will facilitate smooth operations and continued access to the benefits of the scheme.