Central Board of Indirect Taxes and Customs (CBIC) to notify the Korean Won (WON) and Turkish Lira (TRY) in the List of Currencies for Exchange Rate.
• Under Section 14 of the Customs Act, 1962 the Central Board of Indirect Taxes and Customs (CBIC) notifies the Rate of Exchange for the purpose of conversion of foreign exchange to Indian Rupees (INR) and vice versa for assessment of imports & exports.
• Purpose: Currently, CBIC notifies exchange rates for 20 currencies for the purpose of valuation of imported and exported goods and it has been now decided to include 2
more currencies namely Korean Won (WON) and Turkish Lira (TRY) in the list of such currencies.
• Need to include the two currencies: Due to high value and volume of trade with both the countries:
- India-South Korea: The bilateral trade between India-South Korea grew to $16.36 Billion during 2017-18 from $12.59 Billion in 2016-17 and South Korea is ranked 8th amongst India’s trade partners in terms of imports during 2017-18.
- Also, as India has Comprehensive Economic Partnership Agreement (CEPA) with South Korea, the trade flow between the two countries is expected to grow further.
- India-Turkey: Bilateral trade between India & Turkey also stood at US $ 7.2 Billion during 2017-18.
• Benefits of adding foreign currency u = in exchange rate system:
- Improve Trade practice: It will facilitate trade & business by easing the process of conversion of these currencies into Indian Rupee and vice versa.
- Increase Exports: The initiative is also anticipated to help the exporters claim the benefits of Merchandise Export Incentive Scheme (MEIS) easily, as the rates of TKY and WON will be readily available on the realization date of remittances.
- Decreases transaction cost: It is expected to decrease the transaction cost and enhance the ease of doing business, thereby, benefitting the Indian, Korean and Turkish businesses.
Central Board of Indirect Taxes and Customs (CBIC)
• It is a part of the Department of Revenue under the Ministry of Finance, Government of India.
• It is one of the oldest government departments established during the British colonial period.