by Export houses, trading houses, star trading houses, and superstar trading houses are types of export-oriented organizations that are recognized by the Government of India. These organizations are classified based on their export performance and are entitled to certain benefits and incentives provided by the government.
Export houses, trading houses, star trading houses, and superstar trading houses play an important role in India’s foreign trade and are entitled to various benefits and incentives provided by the government. However, these organizations must comply with various regulations and reporting requirements to maintain their status and eligibility for these benefits.
Export Houses Objective, Criteria and Benefits
Export houses are companies that engage in the export of goods and services. To be classified as an export house, a company must meet certain criteria set by the government, such as having a minimum export turnover of Rs. 5 crore in the previous financial year. Export houses are eligible for various benefits, such as duty drawback and exemption from certain taxes and duties.
Objectives:
The primary objective of an export house is to facilitate the export of goods and services from the country to other countries. Some of the other objectives of export houses are as follows:
- To identify and tap new international markets for various products and services.
- To act as a link between the manufacturers and exporters in the country and the importers in foreign countries.
- To assist the manufacturers in the country to develop products and services that are suitable for international markets.
- To provide support and assistance to exporters in terms of finance, marketing, and logistics.
- To promote the country’s brand image and increase the visibility of its products and services in international markets.
Criteria:
To qualify as an export house, a business must meet the following criteria:
- The business should have a minimum export turnover of Rs. 5 crores in the previous financial year.
- The business should have a minimum net worth of Rs. 1 crore.
- The business should have an import-export code (IEC) issued by the Director General of Foreign Trade (DGFT).
- The business should have a positive track record of compliance with various laws and regulations related to exports.
Benefits:
Export houses enjoy several benefits that help them to grow and expand their business. Some of the key benefits of export houses are as follows:
- Access to international markets: Export houses have access to various international markets, which can help them to tap new customers and expand their business.
- Financial assistance: Export houses can avail of various financial assistance schemes offered by the government to promote exports.
- Brand recognition: Export houses can help in promoting the country’s brand image and increasing the visibility of its products and services in international markets.
- Increased profits: Export houses can generate higher profits by selling their products and services in international markets where the demand is higher than in the domestic market.
- Diversification of risks: Export houses can diversify their risks by tapping into multiple international markets, thereby reducing their dependence on a single market.
Trading Houses Objective, Criteria and Benefits
Trading houses are companies that are primarily engaged in the trading of goods. To be classified as a trading house, a company must meet certain criteria set by the government, such as having a minimum export turnover of Rs. 50 crore in the previous financial year. Trading houses are eligible for benefits such as duty drawback, exemption from certain taxes and duties, and access to special import licenses.
Criteria for Trading Houses:
- Export Performance: Trading Houses should have a minimum export turnover of Rs. 30 crores in the preceding three licensing years.
- Foreign Exchange Earnings: Trading Houses should have a minimum foreign exchange earnings of Rs. 15 crores in the preceding three licensing years.
- Status Holder: Trading Houses should have a recognized status as a Star Trading House, Super Star Trading House or Export House.
Benefits of Trading Houses:
- Access to Export Promotion Capital Goods (EPCG) Scheme: Trading Houses are eligible for the EPCG Scheme, which enables them to import capital goods at a concessional rate of duty for enhancing their export competitiveness.
- Duty Drawback Benefits: Trading Houses are entitled to duty drawback benefits, which allow them to claim a refund of the duties paid on inputs used for exports.
- Faster Customs Clearance: Trading Houses enjoy faster customs clearance, as they are recognized by the government and have a good track record of compliance.
- Financial Assistance: Trading Houses can avail of various financial assistance schemes provided by the government, such as the Export Credit Guarantee Corporation of India (ECGC) scheme and the Export-Import Bank of India (EXIM Bank) scheme.
- Brand Recognition: Trading Houses with a good track record of exports and compliance are recognized as trustworthy business partners by foreign buyers, which enhances their brand recognition and value in the international market.
- Access to Market Information: Trading Houses have access to market intelligence and information, which helps them to identify potential markets and buyers for their products.
Star Trading Houses Objectives, Criteria and Benefits
Star trading houses are companies that are primarily engaged in the trading of goods and have made significant contributions to India’s foreign trade. To be classified as a star trading house, a company must meet certain criteria set by the government, such as having a minimum export turnover of Rs. 150 crore in the previous financial year. Star trading houses are eligible for benefits such as duty drawback, exemption from certain taxes and duties, access to special import licenses, and access to preferential treatment in government procurement.
To qualify as a Star Trading House, a company must meet certain criteria, including:
- Export performance: The company must have achieved a minimum export turnover of US$10 million in the preceding three licensing years.
- Net foreign exchange earnings: The company must have earned a minimum net foreign exchange of US$5 million during the preceding three licensing years.
- Value addition: The company must have a minimum value addition of 20% on the FOB (Free on Board) value of exports.
- Legal compliance: The company must have a satisfactory track record in respect of compliance with export obligation, Customs, Central Excise, and Service Tax.
- Good reputation: The company must have a good reputation in the international market.
The benefits of being a Star Trading House are numerous. Some of the key benefits include:
- Priority treatment: STH are given priority treatment in the allocation of export licenses, import licenses, and foreign exchange.
- Reduced documentation: STH are permitted to self-certify the origin of their exports, which reduces the documentation requirements and speeds up the export process.
- Import privileges: STH are permitted to import all types of goods, including capital goods, raw materials, and components, without any restrictions.
- Duty-free imports: STH are eligible for duty-free imports of capital goods under the Export Promotion Capital Goods (EPCG) scheme.
- Marketing and promotion: STH are eligible for financial assistance from the government for marketing and promotional activities, such as participating in trade fairs and exhibitions.
- Bank credit: STH are eligible for priority sector lending by banks and financial institutions.
Export, Trading, Star Trading, Superstar Trading Houses Procedures and Documentation
Export Houses:
Procedures: Export houses need to apply for an export house certificate, which is valid for three years. They must submit an application along with the required documents to the concerned regional authority of the Directorate General of Foreign Trade (DGFT). The documents required include export/import license, PAN card, bank certificate, and proof of export performance.
Documentation: Export houses need to maintain proper documentation for export transactions, including export invoices, shipping bills, export declarations, and relevant export permits. They must also comply with all regulations related to export documentation.
Trading Houses:
Procedures: Trading houses need to apply for a trading house certificate, which is valid for three years. They must submit an application along with the required documents to the concerned regional authority of the DGFT. The documents required include export/import license, PAN card, bank certificate, and proof of export/import performance.
Documentation: Trading houses need to maintain proper documentation for import and export transactions, including purchase orders, invoices, shipping documents, and other relevant trade documents. They must also comply with all regulations related to trade documentation.
Star Trading Houses:
Procedures: Star trading houses need to apply for a star trading house certificate, which is valid for three years. They must submit an application along with the required documents to the concerned regional authority of the DGFT. The documents required include export/import license, PAN card, bank certificate, and proof of export/import performance.
Documentation: Star trading houses need to maintain proper documentation for import and export transactions, including purchase orders, invoices, shipping documents, and other relevant trade documents. They must also comply with all regulations related to trade documentation.
Superstar Trading Houses:
Procedures: Superstar trading houses need to apply for a superstar trading house certificate, which is valid for three years. They must submit an application along with the required documents to the concerned regional authority of the DGFT. The documents required include export/import license, PAN card, bank certificate, and proof of export/import performance.
Documentation: Superstar trading houses need to maintain proper documentation for import and export transactions, including purchase orders, invoices, shipping documents, and other relevant trade documents. They must also comply with all regulations related to trade documentation.
