If you are an exporter of goods and services in India, being registered under Star Export House and being recognized as a status holder can bring you special privileges to facilitate your business transactions.
Who is a Status Holder or Star Export House?
As per the updates to the Foreign Trade Policy of 2015-2020, exporters of goods and services in India are assigned status holder positions in accordance with their export performance.
If you have attained a leadership position in your business niche and have an excellent track record of international commerce, you can be a status holder. You must have also made significant contributions to India's foreign trade. Furthermore, you must agree to undertake the mentoring of upcoming Indian entrepreneurs and thus help strengthen India's export-related commerce.
Watch this short video on the Star Export House / Status Holder Certification which explains what exactly is Star export house certification, what is the eligibility criteria, its practical benefits & How to apply for it? & finally, how can we at Afleo Consultants help you in getting a Status Holder Certificate from DGFT.
Status Holder Certificate Eligibility Criteria
You can get status holder recognition in any of the five categories from One Star to Five Star Export House. Your export performance FOB/FOR value for them should be $3 million, $25 million, $100 million, $500 million, and $2000 million, respectively.
The above Export performance is to be achieved in the current plus previous three Financial Years. For Example, if You are applying for Star Export House Certification in July 2019, then your total Export Turnover for the Current FY (i.e April to July 2019) plus previous three FY (i.e 2016-17, 2017-18 & 2018-19) should be $ 3 million for One Star Export House Certification.
Important Notes:
- Turnover of only those shipments can be counted for which e-brc has been generated.
- Export performance in at least two out of the four Financial Years is compulsory, in order to get Status Holder Certificate.
- The DGFT does not recognize exports made on re-export basis.
For the export performance, the DGFT will consider the Free on Board (FOB) value of export earning in free foreign exchange. In the case of deemed exports—that is, transactions involving goods that remain in the country and which are paid for either in Indian or foreign freely convertible currency —the DGFT will take into account the FOB/FOR value of the exports after it is converted from Indian rupees to US dollars. For this conversion, the exchange rate will be as declared by the Central Board of Excise and Customs (CBEC) on 1st April of the Financial Year.
It is also important here to understand what kind of sales can be considered towards the export performance of a Company:
- Physical Export of Goods (Including supplies to SEZ Units)
- Export of Services.
- Deemed Exports (i.e Supplies to EOUs /EHTPs / STPs / BTPs etc.)
- Exports of SEZs / EOUs /EHTPs / STPs / BTPs, if clubbing is sought
Criteria for receiving Double Weightage
As an IEC-holder exporter, you can get double weightage if you meet any one of the following criteria:
- You have a MSME/SSI Certificate.
- You have manufacturing units that operate as per the ISO/BIS standards.
- Your business units are situated in Sikkim, Jammu & Kashmir, and other northeastern states.
- Your business units are situated in the Agri Export Zones.
- The grant of double weightage, incidentally, is only for the One Star Export House Status category.
Let us look at an example explaining the Double weightage concept:
XYZ farms produced export quality Spices. Their combined annual turnover for the previous three financial years as well as the current financial year was 1.5 million dollars. Minimum turnover required for One-star Export House category is 3 million dollars. However, They had an MSME/SSI Certificate. In such a case they can be granted the double weightage benefit. So with the grant of double weightage their turnover of 1.5 million will now be calculated as 3 million dollars (1.5 x 2=3) and thus they will be granted the Status Holder Certificate of One Star Export House.
The criteria for receiving double weightage is applicable to only one star export house. This criteria is not applicable to other status holder categories.
Important Note for the Calculation of Export Performance
You cannot transfer your export performance to another IEC holder, or receive theirs in return. As mentioned earlier, in evaluating your export performance, the DGFT disregards exports made on the basis of disclaimer letter or on re-export basis. However, if you are exporting items related to Special Chemicals, Organisms, Materials, Equipment and Technologies (SCOMET) and other items under Authorisation, these do count towards calculating your export performance.
Why Afleo?
If you would like more information about becoming a status holder and bolstering your exports business, please don’t hesitate to contact us here at Afleo.com. Our young, dedicated, and knowledgeable team of professionals will be prepared to assist you in every way.
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