Scribd
Upload
30 views4 pages

How Do Export Incentives Work in India

Export incentives in India include economic assistance like low-cost loans, tax exemptions and subsidies to help exporters reduce costs and set competitive global prices. Major schemes provide incentives like duty exemptions, refunds on taxes and capital goods imports at zero duty to boost exports of goods and services.

Uploaded by

rsharma2910
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
30 views4 pages

How Do Export Incentives Work in India

Export incentives in India include economic assistance like low-cost loans, tax exemptions and subsidies to help exporters reduce costs and set competitive global prices. Major schemes provide incentives like duty exemptions, refunds on taxes and capital goods imports at zero duty to boost exports of goods and services.

Uploaded by

rsharma2910
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
You are on page 1/ 4

How do export incentives work in India?

Export incentives in India are economic assistance given to


exporters like low-cost loans, tax exemptions, subsidies and
government-financed advertisements, among others, it helps
them reduce the overall export cost, thus helping them set
competitive prices in the global market. All government
incentives by countries must be in compliance with the
World Trade Organization (WTO), which keeps a check on
legal and ethical world trade practices.
Related read: Guide to NIRVIK scheme for exporters

Top export incentives for exporters


Below are a few export incentives schemes in India that
helps MSMEs and sellers avail benefits:

1. SEIS (Service Exports from India Scheme)


SEIS was introduced to encourage sellers who export
notified services. Under this export scheme, an incentive of
3-7% of the net foreign exchange earnings is provided to
service exporters. The requirement from an exporter is to
have an active IEC with minimum net foreign exchange
earnings worth US$ 15,000 (INR 11L approx) to be eligible
for a claim under the scheme2.

2. RoDTEP (Rebate of Duties & Taxes on Exported Products

scheme)
Replacing the old MEIS (Merchandise Exports from India
Scheme) in a phased manner from December 2020, the
RoDTEP is the new export incentive scheme that offers
refund on all hidden and other taxes that were not refunded
any other export incentive scheme. This can be central and
state taxes on transportation fuel used on export products,
duties on electricity used for product manufacturing, toll
tax, stamp duties on import-export legal paperwork, etc3.
Understanding RoDTEP scheme: A guide for Indian exporters

3. EPCG (Export Promotion Capital Goods Scheme)


Under this scheme, capital goods (goods that are used to
manufacture other products like leather used to make
leather bags, etc) used in the pre-production, production,
and in post-production of final export products can be
imported at 0% customs duty, also called Zero duty EPCG.
This scheme also helps reduce the service exporter’s capital
costs4.
Related read: All you need to know about Interest Equalisation
Scheme and its benefits

4. RoSCTL (Rebate on State & Central Taxes and Levies

scheme)
The The new export incentive scheme — RoSCTL, introduced
in 2019, is applicable on all readymade apparel and textiles
like bedsheets, clothing, garments, carpets, rugs, etc. This
scheme grants refund on taxes such as VAT on
transportation fuel, captive power, ‘mandi’ tax and
electricity duty5.

5. AAS (Advance Authorization Scheme)


Advance Authorization Scheme (AAS) allows duty-free imports
of raw materials, which are required to produce and
manufacture final export products. The provision covers
fuel, packaging material, and some wastage during the
production of the final product. It allows exporters to import
raw materials at 0% import duty if those raw materials will
be used to manufacture export products6.
6. NIRVIK Scheme
Providing high insurance cover, reduced premium for small
exporters and a simplified claim settlement process, the
NIRVIK scheme was introduced by the ECGC (Export Credit
Guarantee Corporation of India). It is primarily an insurance
cover guarantee scheme that provides a cover of up to 90%
of the principal and interest, as against the current credit
guarantee of only up to 60% loss7.

7. EOU Scheme (Export Oriented Units)


The EOU scheme was introduced in 1980 with the aim to
encourage exports by creating additional production
capacity, earn foreign exchange to the country and to
generatinge additional employment. 2 It provides a few
waivers and concessions in compliance and taxes to the
exporters. The companies that are set to export their 100%
production of goods are allowed to set up an Export
Oriented Unit (EOU)8.

8. GST refund for exporters


GST (Goods & Services Tax) Act offers a few schemes to
exporters in India:
LUT Bond Scheme – Exporters can export goods without
paying any GST by obtaining a ‘Letter of Undertaking’
(LUT) bond.
IGST Refund – Exporters can pay Integrated GST on exports,
and later claim the refund of that amount from the customs
department.
1% GST benefit for merchant exporters – Merchant exporters
can get export goods from local suppliers at a 0.1%
concessional GST rate9.
Related read: Guide to the Export Oriented Units (EOUs) scheme
and how to avail its benefits

9. Duty Free Import Authorisation (DFIA Scheme)


The purpose of the Duty Free Import Authorization (DFIA)
scheme is to allow the duty-free imports of raw materials.
This export incentive scheme enables duty-free imports of
fuel, oil, inputs, energy resources, and the catalyst
consumed/ utilized in the process of production of export
products. Imports under this scheme shall be exempted only
from the payment of Basic Customs Duty (BCD)10.

10. Duty Drawback Scheme (DBK Scheme)


This scheme is a special rebate under Section 75 of the
Indian Customs Act on exported products or materials. It
allows exporters to get concessions or compensation on
applicable products used in the processing of goods that are
manufactured in India and then exported to foreign
countries11.

11. Duty Entitlement Passbook (DEPB) Scheme


The DEPB scheme consists of two parts — post-export DEPB
and pre-export DEPB (eliminated with effect from April 1,
2000). Exporters can avail this scheme after the export at
predetermined credit on the FOB (Free On Board) value of
products. The DEPB rates depend on the FOB value or value
cap, whichever is lower. The key benefit of this scheme is
that it can be availed on all import goods except restricted
products such as gold, gold pens, gold watches, nibs, etc12.

12. Interest Equalisation Scheme (IES)


This export incentive scheme provides pre- and post-
shipment export credit to exporters. It is implemented as
well as governed by the Reserve Bank of India (RBI) and
respective banks. The scheme provides 5% of interest to all
manufacturers in the MSME sector and 3 % financial support
to all exporters in 416 tariff lines13.

13. Market Access Initiative (MAI) Scheme


The MAI scheme provides financial assistance in export
promotion activities to export promotion organizations,
trade promotion organizations, national-level institutions,
research institutions, exporters, laboratories, etc.

14. Transport and Marketing Assistance Scheme (TMA

Scheme)
The TMA scheme provides financial support to transport and
marketing of agricultural products. It is extended to all
exporters of eligible agricultural products who are
registered with the concerned Export Promotion Council as
per the Foreign Trade Policy. The scheme remained in
operation for exports up to 31.03.2021.

You might also like

pFad - Phonifier reborn

Pfad - The Proxy pFad of © 2024 Garber Painting. All rights reserved.

Note: This service is not intended for secure transactions such as banking, social media, email, or purchasing. Use at your own risk. We assume no liability whatsoever for broken pages.


Alternative Proxies:

Alternative Proxy

pFad Proxy

pFad v3 Proxy

pFad v4 Proxy