Ill-served by interpretation : The denial of SFIS benefits

May 18,2018
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Dr. Ravindran Pranatharthy, Advocate

Interpretation, it is said in jest, should be left to the people who make interpretation as their business, that is, lawyers and judges. The bureaucrats who have so many fats in the fire look like having caught on to them. It may not be very productive to have a wide-ranging foreign trade policy and still have a committee of officials to interpret that policy. The policy apparatus in the department of commerce overseeing the contours of the Foreign Trade Policy has generally not been known for throwing wide surprises. If anything, trade policy requires stability of policy and predictability of administration. However, they broke the mould by announcing that in their interpretation of the Served From India Scheme (SFIS), the scrip benefits cannot be given to service exporters in India if they represented brands “not identified as Indian brand”. As the administration weighed in the prospects of earning sizable revenues by denying adjustments out of SFIS certificates, a tide of shock notices to hundreds of service exporters in India has followed, charging them with using brands “not identified as Indian Brands” and demanding the refund of “benefits” taken from the SFIS certificates already granted and also well after the policy interpretation committee had made known its controversial views. According to reports in the business and tax press, the demands would run into several thousands of crores of rupees. The service exporters have not been taking things lying down. They have knocked at the gates of the judiciary for justice.

A very recent episode in the on-going nation-wide saga is the judgment of the Hon’ble Madras High Court in the case of Adyar Gate Hotel Vs UOI [TS-185-HC-2018(MAD)-FTP]. The esteemed Court relegated the writ petitioners to the unappetising routine of departmental adjudication despite their plea for judicial protection from the stark reality of rubber-stamped outcome in the light of decisions stated to have been taken by officials.

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