India’s Directorate General of Foreign Trade (DGFT) plays a crucial role in facilitating international trade by providing exporters with a range of benefits, schemes, and incentives. These DGFT benefits for exporters are designed to encourage growth, improve competitiveness, and ensure smooth operations in global markets. However, many exporters fail to capitalize fully on these benefits due to common mistakes in the claiming process. Such errors not only lead to financial losses but can also attract penalties and unnecessary delays.
In this article, we will discuss the most frequent mistakes exporters make when claiming DGFT benefits, why they happen, and how they can be avoided.
Exporters who understand these pitfalls can ensure better compliance, smoother claim processes, and higher profits.
Understanding DGFT Benefits for Exporters
Before diving into the mistakes, let us briefly understand what DGFT benefits include. Exporters in India can avail themselves of various schemes such as:
- Export Promotion Capital Goods (EPCG) Scheme—Allows import of capital goods at zero customs duty for production.
- Advance Authorisation Scheme (AAS)—Duty-free import of inputs required for manufacturing export products.
- Remission of Duties and Taxes on Exported Products (RoDTEP)—Refund of embedded taxes not rebated earlier.
- Status Holder Certificates—Recognition of high-performing exporters with faster clearances and additional privileges.
Top Mistakes Exporters Make While Claiming DGFT Benefits
- Incomplete or Incorrect Documentation
One of the most common mistakes is submitting incomplete or incorrect documents. Exporters often overlook essential details such as shipping bills, export invoices, or e-BRCs (electronic bank realisation certificates). Missing signatures, wrong HS codes, or incomplete declarations can lead to outright rejection of claims.
Solution: Exporters should maintain a proper checklist and regularly update themselves with DGFT’s documentation requirements. Consulting with a DGFT Consultant can help in verifying accuracy before submission.
- Misclassification of Products
Incorrectly classifying products under the wrong HS code is another frequent error. Since DGFT schemes are product-specific, any misclassification may disqualify the exporter from claiming the benefit.
Solution: Always cross-check HS codes with the latest Customs Tariff and DGFT notifications. Proper classification ensures eligibility under the right scheme.
- Missing Claim Deadlines
DGFT benefits have strict deadlines for filing applications. Many exporters fail to claim within the prescribed time frame, leading to automatic rejection. For example, RoDTEP claims are time-sensitive and must be filed immediately after exports.
Solution: Maintain a compliance calendar to track deadlines. Appointing a dedicated compliance officer or working with a professional consultant ensures timely claims.
- Lack of Knowledge of Policy Updates
DGFT policies undergo frequent changes. Exporters often remain unaware of the latest amendments, leading to filing claims under outdated rules. This mistake is particularly costly in schemes like EPCG or AAS, where the obligations are dynamic.
Solution: Subscribe to DGFT notifications and industry updates. Regular training sessions for staff dealing with export documentation can also help.
- Overlooking Export Obligations
Under schemes like EPCG and AAS, exporters must meet export obligations within a specified period. Many exporters ignore these obligations or miscalculate their fulfilment, inviting penalties and cancellation of benefits.
Solution: Properly calculate obligations before availing of schemes. Keep a periodic track of progress to ensure compliance with deadlines.
- Errors in e-BRCs
The e-BRC issued by banks is critical proof of the realisation of export proceeds. Any error in details like invoice number, amount, or shipping bill can lead to claim rejection.
Solution: Regularly reconcile bank data with export records. Coordinate closely with banks to ensure that the e-BRC reflects accurate details.
- Claiming Under Ineligible Schemes
Sometimes exporters attempt to claim benefits under schemes for which they are not eligible, either due to a lack of awareness or misinterpretation of guidelines. This leads to wasted effort and rejections.
Solution: Read the scheme guidelines carefully before applying. A DGFT Consultant can guide exporters in identifying the right scheme that matches their business profile.
- Non-Compliance with Technical Requirements
Exporters often fail to comply with the technical details of filing, such as digital signatures, uploading documents in the required format, or using the DGFT portal correctly. Even small errors in online applications can result in rejection.
Solution: Familiarize yourself with the DGFT portal and ensure technical compliance. Regular staff training on the portal can prevent avoidable errors.
- Ignoring Post-Issuance Compliance
Even after obtaining licenses or scrips, exporters must comply with post-issuance obligations like submission of export details, redemption of licenses, or periodic returns. Ignoring these requirements can result in suspension of future claims.
Solution: Maintain a post-issuance compliance tracker and assign responsibility to ensure the timely submission of all required reports.
- Not Seeking Professional Help
Many exporters hesitate to consult professionals due to cost considerations, but this often leads to bigger financial losses due to rejected claims or penalties.
Solution: Partnering with an experienced DGFT Consultant can save time, ensure error-free submissions, and help maximize available benefits.
Conclusion
Claiming DGFT benefits can significantly reduce costs and enhance profitability for exporters. However, common mistakes such as incomplete documentation, missing deadlines, or misclassification of products can lead to rejection of claims and financial losses. By understanding these pitfalls and adopting best practices, exporters can ensure smooth compliance and maximize incentives. Working with a professional DGFT Consultant is often the best way to avoid errors and make the most of the available schemes.
In the competitive world of international trade, exporters who master the art of compliance not only safeguard their benefits but also gain a strategic edge in global markets.
