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CMA Final · Indirect Tax Laws and Practice · Export Promotion Schemes under Foreign Trade Policy

Kaveri Software Services of Bengaluru exports IT services and does not claim any benefit under the foreign trade policy, nor does it deal in specified services or specified technologies. Which statement follows from Section 7 of the Foreign Trade (Development and Regulation) Act, 1992?

An Importer-exporter Code Number is not necessary. The proviso to Section 7 requires it for services or technology only where the provider takes foreign trade policy benefits or deals in specified services or technologies, and Kaveri does neither.

  1. AAn Importer-exporter Code Number is mandatory for every service export
  2. BAn Importer-exporter Code Number is not necessary for this service exportCorrect
  3. CAn Importer-exporter Code Number is needed only if the export value exceeds ₹10 lakh
  4. DAn Importer-exporter Code Number is needed but may be granted after the export

Explanation

The proviso to Section 7 says that for import or export of services or technology, the code number is necessary only when the provider takes benefits under the foreign trade policy or deals with specified services or technologies. Kaveri does neither, so no code is required. No value threshold appears in the text.

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