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Chapter
13
Export Incentives
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Aseem Kumar
Excel Books
Export Incentives
The various incentives/exemptions available to exporters in India in greater details: Sales Tax/VAT Exemption Excise Exemption Duty Drawback Income Tax Concessions Import Concessions Special Economic Zones Free Trade & Warehousing Zones Star Export Houses EOUs, Electronic Hardware Technology Parks, Software Technology Parks, Bio-Technology Parks Deemed Exports
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Aseem Kumar
Excel Books
Export Incentives
Cont.
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Aseem Kumar
Excel Books
Export Incentives
The exporter can make use of 'H Forms' supplied by the CST (Central Sales Tax) authorities
that are being continued even now in the VAT regime. The application has to be supported by the following documents: Copy of Customs Certified Shipping Bill Copy of Customs Certified Invoice Copy of Letter of Credit Copy of Confirmed Export Order
The supplier, on the other hand, can submit the following documents with his VAT return to justify zero rating of his particular sale to the exporter:
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Purchase order from exporter. Form 'H'. Copy of Bill of Lading/Air-Way Bill
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Aseem Kumar
Excel Books
Export Incentives
Excise Exemption
Excise is a tax on production or manufacture of goods. It is a duty levied on the production of goods and the liability of payment of excise duty arises immediately upon manufacture of goods. In India, excise duty is governed by the provisions of the Central Excise Act, 1944. Exporters can avail excise clearance in the following ways: Exports under Claim of Excise Rebate Triplicate Quadruplicate Quintuplicate Sextuplicate
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Excel Books
Export Incentives
5. Original copy of duly ARE-I/ARE-II duly endorsed by the Customs Officer the export of the consignment 6. disclaimer certificate in case where the claimant is other than the exporter.
Export under Bond- Under Rule 19 of Central Excise Rules, an exporter is permitted to remove excisable goods for export without payment of excise duty by executing a bond (legal undertaking) in favour of the excise authorities for the amount of the excise duty payable.
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Aseem Kumar
Excel Books
Export Incentives
Duty Drawback
Duty drawback is an incentive given to the exporters of different categories of goods under the "Customs and Central Excise Duty Drawback Rules, 1995". The duty drawback scheme is administered by the Directorate of Duty Drawback in the Ministry of Finance, Government of India. There are two types of drawback rates: I. II. All Industry Rates Brand/Special Brand Rates
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Excel Books
Export Incentives
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Aseem Kumar
Excel Books
Export Incentives
Import Concessions
The Government of India has several schemes in place that allow the exporters to import inputs/ capital goods at concessional rates of import duty. The schemes are discussed below: Export Promotion Capital Goods Scheme (EPCG) Duty Free Import Authorisation Scheme Duty Exemption Passbook Scheme (DEPB)
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Aseem Kumar
Excel Books
Export Incentives
An Advance Licence contains: b) The quantity of each item to be imported or wherever the quantity cannot be the value of the item shall be indicated. c) d) The aggregate CIF value of imports. The FOB/FOR value and quantity of exports/supplies.
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Aseem Kumar
Excel Books
Export Incentives
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Excel Books
Export Incentives
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Aseem Kumar
Excel Books
Export Incentives
Information Technology
Strong telecommunication backbone A unique work environment that powers the city Optic-fibre cable network On-site sub-station for failsafe power Rail station onsite to provide for easy cost effective transport options Pollution-free, clean and green environment
Cont.
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Aseem Kumar
Excel Books
Export Incentives
The following facilities/incentives are available to units in SEZs: No licence required for import. Exemption from customs duty on consumables, spares etc. import of capital goods, raw materials,
Supplies from DTA to SEZ units treated as deemed exports. Reimbursement of Central Sales Tax paid on domestic purchases.
100% income tax exemption for a block of five years, 50% tax exemptions for two years and up to 50% of the profits ploughed back for the next three years under Section 10-A of Income Tax Act. SEZ units may be for manufacturing, trading or service activity. SEZ unit to be positive net foreign exchange earner within three years. automatic
Cont.
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100% Foreign Direct Investment in manufacturing sector allowed through route, barring a few sectors.
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Export Incentives
Facility to realize and repatriate export proceeds within 12 months. suppliers
Re-export imported goods found defective, goods imported from foreign on loan basis etc. Domestic Sales on full duty subject to import policy in force. No fixed wastage norms. Full freedom for sub-contracting including sub-contracting abroad. Job work on behalf of domestic exporters for direct export allowed. No routine examination by Customs of export and import cargo. No separate documentation required for Customs and Exim Policy. In-house customs clearance. Support services like banking, post office clearing agents etc.
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Export Incentives
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Excel Books
Export Incentives
banks. The remittance, however, needs to be received through 100% retention of foreign exchange in EEFC account.
They are permitted enhancement in normal repatriation period from180 days to 360 days. They are entitled for consideration under the Target Plus Scheme. They enjoy exemption from furnishing of Bank Guarantee in schemes under the
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Export Incentives
Deemed Exports
i. Supply of goods against Advance Licence/Advance Licence for annual requirement. ii. Supply of goods to Export Oriented Units. iii. Supply of capital goods to holders of licences under the Export Promotion Capital Goods (EPCG) scheme. iv. Supply of goods to projects financed by multilateral or bilateral agencies. v. Supply of capital goods, including in unassembled/disassembled condition as well as plants, machinery, accessories, tools, dyes. vi. Supply of goods to any project or purpose in respect of which the Ministry of Finance. vii. Supply of goods to the power projects and refineries not covered in (vi) above. viii. Supply of marine freight containers by 100% EOU. ix. Supply to projects funded by UN agencies. x. Supply of goods to nuclear power projects through competitive bidding as opposed to International Competitive Bidding.
Cont.
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Export Incentives
Deemed exports are allowed the following privileges: Advance Licence for intermediate supply/deemed export/DFRC/DFRC for
intermediate supplies Deemed Export Drawback Exemption from terminal excise duty where supplies are made against International duty will be given.
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