R-Adag tower arm commits to Rs7,800 crore exports in 8yrs (Live mint.com 14th Feb 2008)Reliance Infratel Ltd, the telecom infrastructure firm that is part of the Reliance-Anil Dhirubhai Ambani Group (R-Adag), needs to export products and services worth Rs7,800 crore over the next eight years or pay a duty of Rs1,555.7 crore, according to documents filed by the firm with the stock market regulator, the Securities and Exchange Board of India (Sebi).
Currently, the firm does not have any export products or services.
Reliance Infratel has been importing some of the equipment that goes into the creation of telecom infrastructure and on 9 January obtained an import licence under an export promotion scheme called the Export Promotion Capital Goods (EPCG) programme, which allows a company to import equipment, plant and machinery at a lower duty of 5%, provided it exports eight times the duty saved in eight years.
For example, if a company imports equipment worth Rs10,000 crore and the normal import duty is 10%, it would mean a duty payment of Rs1,000. However, under the EPCG scheme, firms pay only 5% import duty, or Rs500 crore. But then the importing firm has to export Rs4,000 crore worth of goods/services over the next eight years — or eight times the amount of duty saved.
“The exports made by the Reliance-Anil Dhirubhai Ambani Group will enable the group (including Reliance Infratel) to meet all its export obligations under the EPCG scheme,” an R-Adag spokesperson said in response to an email questionnaire asking how Reliance Infratel would fulfil its obligation. The spokesperson did not detail R-Adag’s current export level nor how much each company within the group exports, except to say, “based on our conservative estimates, the group exports will be always greater than group’s export liabilities.” More
Currently, the firm does not have any export products or services.
Reliance Infratel has been importing some of the equipment that goes into the creation of telecom infrastructure and on 9 January obtained an import licence under an export promotion scheme called the Export Promotion Capital Goods (EPCG) programme, which allows a company to import equipment, plant and machinery at a lower duty of 5%, provided it exports eight times the duty saved in eight years.
For example, if a company imports equipment worth Rs10,000 crore and the normal import duty is 10%, it would mean a duty payment of Rs1,000. However, under the EPCG scheme, firms pay only 5% import duty, or Rs500 crore. But then the importing firm has to export Rs4,000 crore worth of goods/services over the next eight years — or eight times the amount of duty saved.
“The exports made by the Reliance-Anil Dhirubhai Ambani Group will enable the group (including Reliance Infratel) to meet all its export obligations under the EPCG scheme,” an R-Adag spokesperson said in response to an email questionnaire asking how Reliance Infratel would fulfil its obligation. The spokesperson did not detail R-Adag’s current export level nor how much each company within the group exports, except to say, “based on our conservative estimates, the group exports will be always greater than group’s export liabilities.” More
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