The Indian government has implemented various initiatives to boost exports and support businesses engaged in international trade. One such initiative is the Status Holder Certificate, granted by the Directorate General of Foreign Trade (DGFT) under the Foreign Trade Policy (FTP). This certificate offers multiple benefits to exporters, making it a valuable asset for businesses looking to expand their global reach.
In this article, we will discuss the importance of a Status Holder Certificate, eligibility criteria, benefits, and the application process to help exporters understand why they should apply for it.
What is a Status Holder Certificate?
A Status Holder Certificate is awarded to exporters who have demonstrated significant export performance. It recognizes the excellence and contribution of these exporters in promoting India’s international trade. The certificate provides various financial and non-financial benefits, making it easier for exporters to enhance their business operations and compete globally.
Under the Foreign Trade Policy (2023-2028), exporters achieving specific thresholds in their export turnover are categorized into different status levels:
- One Star Export House
- Two-Star Export House
- Three-Star Export House
- Four Star Export House
- Five Star Export House
Each status level comes with its own set of benefits, encouraging businesses to increase their exports.
Eligibility Criteria for Status Holder Certificate
Exporters must meet certain criteria to qualify for the Status Holder Certificate:
- Export Performance: The exporter must achieve a certain FOB (Free on Board) value of exports in the past three financial years plus the current year.
- Recognized Exports: Only the Direct Exports and Deemed Exports are considered for eligibility.
- Category of Exporters: All types of exporters, including manufacturer exporters, merchant exporters, service providers, and export-oriented units (EOUs), can apply.
- Export Turnover Requirement: The export value should meet the thresholds specified by DGFT, which vary for different status levels.
Benefits of Obtaining a Status Holder Certificate
The Status Holder Certificate provides numerous advantages to exporters, enhancing their operational efficiency and profitability. Some of the key benefits include:
1. Customs and Excise Benefits
- Faster Clearance: Status Holders receive priority in customs clearance, reducing delays in the export process.
- Self-Certification of Goods: Status Holders can self-certify their goods for compliance with Rules of Origin under different Free Trade Agreements (FTAs), making it easier to export to partner countries.
- Exemption from Bank Guarantees: Exporters with a good track record are exempt from furnishing bank guarantees, saving time and money.
2. Financial Incentives
- Access to Reduced Transaction Costs: Exporters enjoy lower costs for documentation, certification, and other compliance requirements.
- Duty Credit Scrips: Some Status Holders qualify for MEIS (Merchandise Exports from India Scheme) or RoDTEP (Remission of Duties and Taxes on Exported Products) benefits.
- Exemption from Compulsory Negotiation of Documents: Exporters can directly negotiate export documents without involving banks, reducing costs.
3. Enhanced Global Recognition
- A Status Holder Certificate enhances an exporter’s credibility and reputation in the global market.
- International buyers prefer to work with recognized exporters due to their government-backed credibility.
- It helps in securing international contracts and partnerships more easily.
4. Priority Support from DGFT and Banks
- Status Holders receive priority treatment from DGFT and other government agencies in resolving trade-related issues.
- Banks provide better financial services, including lower interest rates and faster loan approvals, to Status Holders.
5. Access to Additional Export Promotion Schemes
- Status Holders can avail of additional EPCG (Export Promotion Capital Goods) Scheme benefits.
- They are eligible for participation in trade fairs, buyer-seller meets, and international business delegations organized by the government.
How to Apply for a Status Holder Certificate?
Exporters need to follow these steps to obtain a Status Holder Certificate:
Step 1: Check Eligibility
- Ensure that your export turnover meets the minimum requirement for the desired status level.
- Maintain proper export documentation for verification.
Step 2: Prepare the Required Documents
The following documents are typically required:
- Application Form ANF-3C (available on the DGFT website)
- Export Performance Statement certified by a Chartered Accountant
- IEC (Importer Exporter Code) Certificate
- GST Registration Certificate
- Self-certified copies of export invoices and shipping bills
Step 3: Submit the Application on the DGFT Portal
- Exporters must apply online via the DGFT website (https://dgft.gov.in/).
- Upload the required documents and pay the necessary fees.
- Apply and track the status online.
Step 4: Verification and Approval
- DGFT officials review the application and verify the documents.
- If approved, the Status Holder Certificate is issued electronically.
Challenges Exporters Might Face
Despite the numerous benefits, exporters may face some challenges when applying for a Status Holder Certificate:
- Complex Documentation: Preparing and submitting the necessary documents can be time-consuming and require professional assistance.
- Compliance Requirements: Exporters must maintain a consistent export record and adhere to foreign trade policies.
- Changing Government Policies: The eligibility criteria and benefits can change depending on updates to the Foreign Trade Policy.
- Understanding Export Categories: Some exporters may face confusion in determining their eligibility due to varying definitions of direct and deemed exports.
Conclusion
Applying for a Status Holder Certificate is a strategic move for exporters aiming to scale their business, reduce operational costs, and enhance their credibility in international markets. The numerous financial, operational, and recognition benefits make it an essential certification for businesses looking to increase their export footprint.
With streamlined customs procedures, financial incentives, and government-backed credibility, exporters can gain a competitive edge in the global market. If you are an exporter meeting the eligibility criteria, applying for the Status Holder Certificate should be your next step to achieving greater success in international trade.
