Promotional Measure

4. Export Promotion Capital Goods Scheme (EPCG)

• New as well as second hand capital goods (Not more than 10 years old) may be imported under EPCG scheme at 5% duty.

• CVD and special additional duty is exempted.

• The importer of capital goods can be made for pre production and post production stages.

• Manufacture exporters Merchants exporter tied to supporting manufacturers service providers and exporter of special agri products, poultry etc. are eligible to import capital  goods under EPCG scheme.

• The import of capital goods under EPCG is subject to actual user condition till the export obligation is completed.

• EPCG is also subject to export obligation of 8 times of duty saved on import of capital goods to be fulfilled over period of 8 years reckoned from the date of issuance of licence( the period is 12 years where the CIF value is Rs. 100 or more / units under scheme of BIFR and state govt. and agri units in Agri Export Zones.

• An EPCG licence holder can source the indigenous capital goods.

• Export obligation should be over and above the average level of export archieved by EPCG holder in preceding three years.

5. Duty Drawback Scheme  

• Under this scheme custom duties and central excise duties on raw materials, components and packing materials used in export products are refunded back to the exporter, on post export basis.

• The drawback scheme is administered by directorate of Drawback, Min. of Finance.

• Drawback is given both to manufacturer exporter and merchant exporter.

• Drawback has been permitted not only on material/inputs used in manufacturer but also processed or subject to any other for exporter of goods from India .

• Drawback will not be allowed if the total foreign exchange spent on inputs used in goods exported is more than the FOB value of the exporter.

• Drawback will also be not allowed if the exporter value of goods is less than the value of imported material used in the exporter goods.

• Drawback will not be allowed if the sale proceeds of the exported goods are not specified time limit.

• Drawback is also not admissible if MODVAT is availed of.

• Center government notifies the goods on export of which the drawback is available.

• Directorate notifies the Drawback rates for various products in the schedule.

• If any item is not covered in the drawback can be claimed, however, an exporter can apply for fixation of its drawback rates.

6. Income Tax Exemption/Deductions

            The major incentives to the exporters under Income Tax Act are

• Deduction in respect of profits and gains from projects outside India (Sec 80HHB)

• Deduction in respect of export turnover (Sec 80 HHC)

• Deduction in respect of earning in foreign exchange by an approved hotel or tour operator or travel agent resident in India (Sec 80 HHD)

• Deduction for export of computer software (Sec 80HHE)

• Deduction of export or transfer of computer software  (Ser 80HHF)

• Deduction in respect of royalties etc. (Sec 800)

• Deduction in respect of certain income from foreign sources like teacher,

• Professionals and employees (Sec 80RR and 80 RRA)

• 10 years tax holiday for newly established industrial units in FTZ/EHTP/SEZ/EOU(Sec 10A, Sec 10B)

7. Sale Tax Exemptions

Purchase of goods meant for exports are exempted from sales tax.

• Purchase of goods has to be registered dealer for the class of goods meant for export

• Exporter has to firnish satisfactory proofs of export of goods to the seller of goods along with two copies of Form H.

Frequently Asked questions on Export & Import  For a comprehensive export guide, you can purchase The Export Handbook. The handbook takes you through the practical aspects of exporting essential for both experienced and novice exporters. It covers Export Procedures and Documentation, Customs Export Regulations, Internet Commerce, Banking and Finance, Export Risk and Credit Insurance, Marine Insurance, Shipping and Air Cargo, Freight Forwarding, Export Packaging and Resources for International Trade.   Order this Hand book  Order for placing Pre-Feasibility  Report  Database of Indian Industries