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What is an Export House Certificate: Benefits and process

An Export House Certificate is given to exporters for significant contributions to the nation's foreign trade. Learn more about its benefits and process.

The Government of India has long recognized the immense contribution that exports continue to make to the country’s economic growth. To provide further encouragement to this sector, it launched multiple benefits including the Export House Certificate — a recognition awarded to accomplished exporters who have demonstrated excellence in international trade. This certificate acknowledges the contributions of exporters to the country’s foreign trade and offers them benefits to improve their global competitiveness. In this blog post, we will discuss what an Export House Certificate is, its eligibility criteria, application process, and the benefits offered.

Introduction to the Export House Certificate

The Government of India, under its Foreign Trade Policy (FTP), has introduced the Export House Certificate, also known as the Status Holder Certificate. This certificate is awarded to businesses that have demonstrated exceptional performance in international trade and have made significant contributions to India's foreign exchange earnings. Eligibility for the Status Holder Certificate extends to exporters dealing in goods, services, and technology, provided they have a valid Importer-Exporter Code (IEC). Besides contributing to India’s export growth, Status Holders are also expected to provide mentorship and guidance to new and aspiring entrepreneurs.¹

Export House Status Holder categories

An applicant may be categorized as a Status Holder if they achieve the threshold export performance as outlined in the FTP 2023². Status Holder categories based on export performance FOB/FOR (as converted) value are as follows:

1. One Star Export House: $3 million
2. Two Star Export House: $25 million
3. Three Star Export House: $100 million
4. Four Star Export House: $500 million
5. Five Star Export House: $2000 million

Eligibility criteria for Export House Certificate

Any exporter involved in the export of goods and services can apply for an Export House Certificate. However, the following factors need to be kept in mind when considering eligibility for application:

● Businesses exporting goods, services, and technology with a valid Importer-Exporter Code (IEC) are eligible for this certification.

● Recognition is based on the business’s export performance. Applicants need to meet the export performance threshold (as indicated in the FTP) for the respective financial year and three preceding financial years (for the Gems & Jewellery sector, export performance for the current and two preceding financial years will be considered).

● The export performance will be calculated on the basis of the FOB (Free on Board) export earnings in freely convertible foreign currencies or in INR, as specified in the FTP.

● For deemed exports, the FOR value in INR is converted to USD according to the exchange rate notified by the Central Board of Indirect Taxes and Customs (CBIC) as applicable on April 01 of each financial year.

● To qualify for consideration, an export performance is necessary in all three preceding financial years (and in all two preceding financial years for the gems and jewellery sector).³

Benefits of the Export House Certificate

Exporters who receive this certificate are eligible for the following benefits and incentives:

● Authorization and customs clearance for imports and exports may be permitted based on self-declaration.

● Exemption from furnishing a bank guarantee for schemes under FTP unless otherwise specified.

● Priority fixing of input-output norms within 60 days by the Norms Committee.

● Exemption from compulsory negotiation of documents through banks. However, remittances and receipts will be received through banking channels.

● Preferential treatment and priority in handling of consignments by relevant agencies.

● Export houses with two or more stars are allowed to establish export warehouses as per the Department of Revenue’s guidelines.

● Three star and above Export Houses are eligible for benefits under the Accredited Clients Programme, following the Central Board of Excise and Customs guidelines.

● Status holders can export freely exportable items at no cost for export promotion, with an annual limit of INR 10 lakhs or 2% of the average annual export realization during the preceding three licensing years, whichever is lower.

● Manufacturers who are Status Holders (three stars and above) can self-certify that their goods originated from India to qualify for preferential treatment under various preferential trading agreements.⁴

Criteria for receiving double weightage

Double weightage can only be granted to those who come under the One Star Export House category. Exports by IEC holders under the following categories shall be granted double weightage for calculation of export performance:

● MSMEs, as defined in the Micro, Small, and Medium Enterprises Development (MSMED) Act 2006.

● Manufacturing units with ISO/BIS certification.

● Units located in Jammu and Kashmir, Ladakh, and in the North Eastern states including Sikkim.

● Units located in Agri Export Zones.

It is important to note that a merchandise shipment or service can get double weightage only once in any one of the above categories.⁵

Documents required for Export House Certificate application

Exporters applying for an Export House Certificate may be asked to submit the following documents (where relevant):

● Certificate of Exports where double weightage has been claimed (applicable only if the application is for a One Star Export House).

● Certificate of Foreign Exchange Earned by Supply of Service.

● Certificate of FOR value of deemed exports.

● Details of exports from SEZs / EOUs / EHTPs / STPs / BTPs units included in IEC and are being considered for the calculation of grant of status.

● Annexure to ANF 3C.⁶

How to obtain an Export House Certificate?

Availing an Export House Certificate has become streamlined and efficient with the introduction of the new system-based automatic generation of Status Holder certificates. Previously, exporters were required to submit an online application along with an export certificate from a Chartered Accountant to obtain an Export House Certificate. The DGFT Regional Offices would then issue the certificate within three days, following laid-down timelines. However, with the new arrangement, exporters no longer need to submit applications manually.

Export recognition is now provided automatically by the IT system, based on available Directorate General of Commercial Intelligence and Statistics (DGCIS) merchandise export electronic data and other risk parameters.

The certification is granted annually in August based on the annual export figures available with the DGCIS. Exporters eligible for a higher status based on additional export data, such as services export or deemed exports, can apply online for a status modification at a later date.⁷

Conclusion

The Export House Certificate highlights the government’s commitment to fostering a thriving export ecosystem in India. By recognizing and incentivizing outstanding export performance, the government aims to encourage exporters to fuel India’s economic expansion and boost global competitiveness. The advantages extended to Status Holders are particularly beneficial to e-commerce exporters and MSMEs, as it reduces compliance hurdles and facilitates smoother export processes.

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Frequently Asked Questions

What is a Status Holder Certificate?

A Status Holder Certificate, also known as the Export House Certificate, is a recognition initiated by the Indian government to acknowledge the remarkable contributions made by exporters to the nation’s foreign trade. It provides exporters with rewards and benefits aimed at enhancing their global competitiveness.

How to calculate export performance for an Export House Certificate?

Export performance for an Export House Certificate is calculated on the basis of the FOB (Free on Board) of export earnings in freely convertible foreign currencies or in Indian Rupees, as specified in the Foreign Trade Policy.⁸

Which type of supplies can be considered for export performance?

Eligibility for the Export House status extends to exporters dealing in goods, services, and technology, provided they have a valid Importer-Exporter Code (IEC).⁹

What is an MSME Export House Status?

When determining eligibility for an Export House Certificate, exporters falling within the Micro, Small, and Medium Enterprises (MSMEs) classification as outlined in the Micro, Small & Medium Enterprises Development (MSMED) Act 2006 will receive double weightage in the assessment of their export performance.¹⁰

What is the validity of an Export House Certificate?

An Export House Certificate or Status Holder Certificate is valid for five years from its date of issuance, or for as long as the Foreign Trade Policy is in effect, whichever comes first.¹¹

Published on April 16, 2024.

Sources:
1. https://icmai.in/upload/Taxation/FTP_2023_0104_23.pdf
2. https://www.indiafilings.com/learn/export-house-certificate/
3. https://icmai.in/upload/Taxation/FTP_2023_0104_23.pdf
4. https://www.indiafilings.com/learn/export-house-certificate/
5. https://content.dgft.gov.in/Website/DGFT%20FAQs%20-%20Status%20Holder%20Certificate%20v1.0.pdf
6. https://content.dgft.gov.in/Website/DGFT%20FAQs%20-%20Status%20Holder%20Certificate%20v1.0.pdf
7. https://pib.gov.in/PressReleasePage.aspx?PRID=1966127#:~:text=In%20a%20meeting%20with%20the,Trade%20Policy%20(FTP)%202023
8. https://icmai.in/upload/Taxation/FTP_2023_0104_23.pdf
9. https://icmai.in/upload/Taxation/FTP_2023_0104_23.pdf
10. https://content.dgft.gov.in/Website/DGFT%20FAQs%20-%20Status%20Holder%20Certificate%20v1.0.pdf
11. https://content.dgft.gov.in/Website/DGFT%20FAQs%20-%20Status%20Holder%20Certificate%20v1.0.pdf

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