EXPORT INCENTIVES EXPORT INCENTIVES AND FACILITIESAND FACILITIES

EXPORT INCENTIVES EXPORT INCENTIVES AND FACILITIESAND FACILITIES

Contents

SHUBHRA SHARMA

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JUHI CHITTORIAJUHI CHITTORIA

TEJASWI BABHALTEJASWI BABHAL

AMRUTA SALVIAMRUTA SALVI

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Government of India gives various incentives to exporters in order to improve their competitiveness in the foreign markets.

These incentives and facilities relate to export performance, promotion of exports, fiscal incentives, schemes aimed at facilitation of imports for exports and various subsidies.

• Duty drawback• Duty entitlement pass book scheme• Status holder exporter scheme• Export Promotion capital goods scheme• Market access initiative• Market development assistance• Served from India scheme• Vishesh Krishi Upaj Yojana (special

agricultural produce scheme)

DUTY DRAWBACKDUTY DRAWBACKDUTY DRAWBACKDUTY DRAWBACK

Section 75 of the Customs Act,1962

The refund Central Excise and Custom Duties paid in respect of the raw materials and other inputs used in the manufacture of the product prior to its export

Section 75 of the Customs Act,1962

The refund Central Excise and Custom Duties paid in respect of the raw materials and other inputs used in the manufacture of the product prior to its export

It refers to the refund in respect of central excise and customs duties paid in respect of raw materials and other inputs used in the manufacture of the product prior to its export.

Exporters can claim the amount of duty drawback as soon as the exports of goods take place.

DUTY DRAWBACKDUTY DRAWBACKDUTY DRAWBACKDUTY DRAWBACK

1.DRAWBACK RATES2.FILING DUTYDRAWBACK CLAIM3.TIME FOR FILING DRAWBACK CLAIM4.DOCUMENTS REQUIRED FOR CLAIMING5.DATE OF RECEIPT 6.PAYMENT7.PROCEDURE ON GOODS EXPORTED BY POST8.REFUND OF DRAWBACK AMOUNT

1.DRAWBACK RATES2.FILING DUTYDRAWBACK CLAIM3.TIME FOR FILING DRAWBACK CLAIM4.DOCUMENTS REQUIRED FOR CLAIMING5.DATE OF RECEIPT 6.PAYMENT7.PROCEDURE ON GOODS EXPORTED BY POST8.REFUND OF DRAWBACK AMOUNT

1.Drawback rates

All industry rate

Brand rate

Special brand rate

Filing Duty Drawback: The processing of drawback is done by customs authorities after the required documents are filed.

Time for Claiming Drawback Claim: Within 3 months from the date of LET EXPORT ORDER.

Payment of duty drawback: within a period of one month from the date of receipt of the claim.

DUTY ENTITLEMENT PASS BOOK

The objective of the DEPB is to neutralize the incidence of Customs duty on the import content of the export product.

Under the DEPB scheme, an exporter may apply for credit, as a specified percentage of FOB value of exports made in freely convertible currency.

The Credit is granted against such export products and at such rates as may be specified by the Director General of Foreign Trade.

• Under the post-export DEPB, which is issued after exports, the exporter is given a duty entitlement Pass Book at a pre-determined credit on the FOB value.

• The claim for the import duty credit is admissible only after the realization of the export proceeds.

• The exporter can use this credit to pay for the import duty on the imports of inputs whether required for the manufacture of the export product or not.

• DEPB is valid for a period of 24 months from the date of its issuance.

• Application should be within 180 days from the date of exports or within 90 days from the date of realization, whichever is later.

• The DEPB and/or the items imported against it are freely transferable.

• It should be noted that the imports under DEPC should be made from the same port from where the exports have been made

APPLICATION FOR GRANT APPLICATION FOR GRANT OF IMPORT DUTY CREDIT OF IMPORT DUTY CREDIT

UNDER DEPBUNDER DEPB

APPLICATION FOR GRANT APPLICATION FOR GRANT OF IMPORT DUTY CREDIT OF IMPORT DUTY CREDIT

UNDER DEPBUNDER DEPBApplication should be made to the licensing authority concerned in the Aayaat Niryaat form along with the following documents:DD for the amount of prescribed application feeExport promotion copy of the DEPB shipping billBank Certificate of exports and realization in appendix 22ASelf attested copy of valid RCMC

Application should be made to the licensing authority concerned in the Aayaat Niryaat form along with the following documents:DD for the amount of prescribed application feeExport promotion copy of the DEPB shipping billBank Certificate of exports and realization in appendix 22ASelf attested copy of valid RCMC

““SERVED FROM INDIA” SERVED FROM INDIA” SCHEMESCHEME

““SERVED FROM INDIA” SERVED FROM INDIA” SCHEMESCHEME

It aims at promoting services exports from India by providing incentives exclusively for the exporters of services.

It aims at promoting services exports from India by providing incentives exclusively for the exporters of services.

RECOGNITION OF RECOGNITION OF EXPORTERS:STATUS EXPORTERS:STATUS

HOLDERSHOLDERS

RECOGNITION OF RECOGNITION OF EXPORTERS:STATUS EXPORTERS:STATUS

HOLDERSHOLDERS1.FACILITIES FOR STATUS HOLDERS2.VALIDITY PERIOD3.APPLICATION FOR RECOGNITION4.EXPORT OBLIGATION5.REFUSAL/SUSPENSION/CANCELLATION OF CERTIFICATE

1.FACILITIES FOR STATUS HOLDERS2.VALIDITY PERIOD3.APPLICATION FOR RECOGNITION4.EXPORT OBLIGATION5.REFUSAL/SUSPENSION/CANCELLATION OF CERTIFICATE

Cut-off level of export Cut-off level of export performance for export performance for export houses/trading houseshouses/trading houses

Cut-off level of export Cut-off level of export performance for export performance for export houses/trading houseshouses/trading houses

category Export performance (in rupees)

Export House 20 crore

Star Export House 100 crore

Trading House 500 crore

Star Trading House 2,500 crore

Premier Trading House 10,000 crore

FOCUS MARKET FOCUS MARKET SCHEMESCHEME

FOCUS MARKET FOCUS MARKET SCHEMESCHEME

Introduced in FTP:2004-09 as modified as on April 7,2006.With a view to diversify India’s exports to the markets of Latin America and AfricaAims at offsetting high freight cost and other disabilities faced by exporters in accessing these markets so as to improve their export competitiveness.Exporters are allowed duty credit scrip @2.5% of the F.O.B value of exports of all the products to these markets.The duty credit can be used to pay for import duty for the import of inputs or goods including capital goods , provided the same is freely importable under the import policyBesides, the duty credit scrip and/or the items imported there under are freely transferable

Introduced in FTP:2004-09 as modified as on April 7,2006.With a view to diversify India’s exports to the markets of Latin America and AfricaAims at offsetting high freight cost and other disabilities faced by exporters in accessing these markets so as to improve their export competitiveness.Exporters are allowed duty credit scrip @2.5% of the F.O.B value of exports of all the products to these markets.The duty credit can be used to pay for import duty for the import of inputs or goods including capital goods , provided the same is freely importable under the import policyBesides, the duty credit scrip and/or the items imported there under are freely transferable

FOCUS PRODUCT FOCUS PRODUCT SCHEMESCHEME

FOCUS PRODUCT FOCUS PRODUCT SCHEMESCHEME

Introduced in FTP:2004-09 as modified as on April 7,2006.

Products exported under this scheme is entitled for the grant of duty credit scrip equivalent to 2.5% of the F.O.B value of exports for each licensing year commencing from 1st april,2006.

Only 50% of the export turnover such products shall be counted for benefits under this scheme.

Introduced in FTP:2004-09 as modified as on April 7,2006.

Products exported under this scheme is entitled for the grant of duty credit scrip equivalent to 2.5% of the F.O.B value of exports for each licensing year commencing from 1st april,2006.

Only 50% of the export turnover such products shall be counted for benefits under this scheme.

VISHESH KRISHI AND VISHESH KRISHI AND GRAM UDYOG YOJANAGRAM UDYOG YOJANAVISHESH KRISHI AND VISHESH KRISHI AND GRAM UDYOG YOJANAGRAM UDYOG YOJANA

Introduced in FTP: 2004-09

This is an initiative for the promotion of export of agricultural products.

The objective of the scheme is to promote export of fruits, vegetables, flowers, minor forest produce, and their value added products, by incentivising exporters of such products.

Exporters of such products shall be entitled for duty credit scrip equivalent to 5% of the FOB value of exports.

The scrip and the items imported against it would be freely transferable.

Introduced in FTP: 2004-09

This is an initiative for the promotion of export of agricultural products.

The objective of the scheme is to promote export of fruits, vegetables, flowers, minor forest produce, and their value added products, by incentivising exporters of such products.

Exporters of such products shall be entitled for duty credit scrip equivalent to 5% of the FOB value of exports.

The scrip and the items imported against it would be freely transferable.

MARKET ACCESS MARKET ACCESS INITIATIVEINITIATIVE

MARKET ACCESS MARKET ACCESS INITIATIVEINITIATIVE

MARKETING MARKETING DEVELOPMENT DEVELOPMENT

ASSISTANCEASSISTANCE

MARKETING MARKETING DEVELOPMENT DEVELOPMENT

ASSISTANCEASSISTANCE1.ELIGIBILITY FOR EXPORTERS2.SCALE OF FINANCIAL ASSISTANCE3.APPLICATION FOR GRANT OF MARKETING DEVELOPMENT ASSISTANCE4.FILING CLAIM UNDER MDA

1.ELIGIBILITY FOR EXPORTERS2.SCALE OF FINANCIAL ASSISTANCE3.APPLICATION FOR GRANT OF MARKETING DEVELOPMENT ASSISTANCE4.FILING CLAIM UNDER MDA

The main thrust is to provide for development of marketing of Indian products and commodities in foreign markets by providing grants in aid for the eligible marketing activities to the eligible exporters.

The eligible exporters can participate in these schemes either directly or through export promotion councils, India trade promotion Organisation etc.

The main thrust is to provide for development of marketing of Indian products and commodities in foreign markets by providing grants in aid for the eligible marketing activities to the eligible exporters.

The eligible exporters can participate in these schemes either directly or through export promotion councils, India trade promotion Organisation etc.

Eligibility of ExportersEligibility of ExportersEligibility of ExportersEligibility of Exporters

The amount of f.o.b value of exports should be up to Rs. 15 crores in the preceding licensing year and,

Its membership of exports promotion council should be complete 12 months old.

The amount of f.o.b value of exports should be up to Rs. 15 crores in the preceding licensing year and,

Its membership of exports promotion council should be complete 12 months old.

Scale of Financial AssistanceScale of Financial AssistanceScale of Financial AssistanceScale of Financial Assistance

The amount of actual assistance is subject to the maximum permissible amount per tour for different countries as mentioned

below:-

The amount of actual assistance is subject to the maximum permissible amount per tour for different countries as mentioned

below:-

The participation of individual companies in The participation of individual companies in the above activities shall be subject to the the above activities shall be subject to the

following conditions:following conditions:

The participation of individual companies in The participation of individual companies in the above activities shall be subject to the the above activities shall be subject to the

following conditions:following conditions:

For EPC/FIEO led Trade Delegations/BSMs only air-fare by Economy Excursion class upto a maximum of Rs. 70,000 (Rs. 1, 00,000 in case of Focus LAC)

shall be permissible.

For participation in Trade Fairs/Exhibitions reimbursement shall be permissible subject to

ceilings mentioned in the column 4 in the above table.

For EPC/FIEO led Trade Delegations/BSMs only air-fare by Economy Excursion class upto a maximum of Rs. 70,000 (Rs. 1, 00,000 in case of Focus LAC)

shall be permissible.

For participation in Trade Fairs/Exhibitions reimbursement shall be permissible subject to

ceilings mentioned in the column 4 in the above table.

AIR FREIGHT SUBSIDY ON AIR FREIGHT SUBSIDY ON HORTICULTURE AND HORTICULTURE AND

FLORICULTURE EXPORTSFLORICULTURE EXPORTS

AIR FREIGHT SUBSIDY ON AIR FREIGHT SUBSIDY ON HORTICULTURE AND HORTICULTURE AND

FLORICULTURE EXPORTSFLORICULTURE EXPORTS

1.PRODUCTS COVERED2.QUANTUM OF SUBSIDY3.GENERAL CONDITIONS4.APPLICATION FOR GRANT OF AIR SUBSIDY

1.PRODUCTS COVERED2.QUANTUM OF SUBSIDY3.GENERAL CONDITIONS4.APPLICATION FOR GRANT OF AIR SUBSIDY

1.Products Coverage

Fresh Fruits: Mangoes other than alphonso, banana, strawberries ,papaya ,watermelon

Fresh Vegetables : Asparagus , broccoli , mushroom

Floriculture products : Cut flowers, live plants/bulbs, gladiolus and other live plants

2.Quantum of Subsidy

Export Markets West Asia ,South East

Asia and CIS Countries

North America , Far East Countries and Europe other than CIS countries

Rate of Susidy• Least of the following:1. Rs.6/kg2. 25% of the air freight

rate approved by IATA3. 1/3rd of FOB valueLeast of the following:1. Rs.10/kg2. 25% of the air freight

rate approved by IATA3. 1/3rd of FOB value

3.General Conditions

Subsidy is provided for transportation from port of loading to the port of destination

Application is considered on first come first serve basis

Application should be filed on fortnightly basis include the shipment sent during the fortnight from 1-15 and 16th to the end of the month

Subsidy is paid only to the direct exporterSubsidy is paid on gross rate actually

shipped and paid for

4.APPLICATION FOR GRANT OF AIR SUBSIDY

• Application on the form prescribed by APEDA should be submitted to the Regional Office of APEDA along with the following documents within 30 days from the last date of the fortnight.

• Custom certified export promotion copy of the shipping bill in original

• Self certified photo copy of the original air way bill

• Custom certified short shipment certificate if any.

• Photo copy of APEDA registration certificate• Custom certified copy of commercial invoice in

original

FACILITIES PROVIDED BY APEDA/MPEDA

The Agricultural and Processed Foods Export Development Authority(APEDA) provides financial assistance for the development and promotion of export of agriculture, horticulture and meat products.

The Marine Products Export Development Authority(MPEDA) provides financial assistance to the exporters of marine products.

FISCAL INCENTIVESFISCAL INCENTIVESFISCAL INCENTIVESFISCAL INCENTIVES

1.SALES TAX EXEMPTION

2.INCOME TAX EXEMPTION

3.SERVICE TAX EXEMPTION

1.SALES TAX EXEMPTION

2.INCOME TAX EXEMPTION

3.SERVICE TAX EXEMPTION

IMPORT FACILITATION FOR EXPORTS

Foreign Trade Policy:2004-09 provides for various facilities for import of capital goods and inputs required for export production. These facilities are as follows:

Export Promotion Capital Goods SchemeAdvance Authorization SchemeDuty Free Import Authorization

(DFIA)Scheme100% EOU/SEZ/STP/BTPFree Trade and Warehousing Zone

EXPORT FINANCING

Promotion of exports is an integral part of the strategy of economic development of India.

To achieve the objective of the promotion of exports, Reserve Bank of India has taken steps to ensure free flow of financial assistance to the export sector at the concessional rates of interest.

FOREIGN CURRENCY FOREIGN CURRENCY RETENTIONRETENTION

FOREIGN CURRENCY FOREIGN CURRENCY RETENTIONRETENTION

The union budget for 1994-95allowed the exporters to maintain foreign currency balances in separate foreign currency accounts known as Exchange Earners Currency Account w.e.f.1.3.1994This was done to consolidate the Liberalized Exchange Rate Management Systems

The union budget for 1994-95allowed the exporters to maintain foreign currency balances in separate foreign currency accounts known as Exchange Earners Currency Account w.e.f.1.3.1994This was done to consolidate the Liberalized Exchange Rate Management Systems