Learn with EXIMTUTOR  | Export Business Guide - FREE DOWNLOAD |- Export Business Useful E-Books

Export Incentives/Benefits

Recent Export Incentives/Benefits in India

Export Incentives are motivating factors provided by Indian Government to boost exports and help to exporters in competitive foreign markets. These incentives and facilities relate to exports performance, promotion of exports, fiscal incentives, schemes aimed at facilitation of imports for exports and various subsidies. Some export benefits are classified in form of  Duty Drawback, Tax Concession MDA, EPCG, DFIA, VKGUY, SFIS, SHIS, FPS, MLFPS &  Focus Market Product Schemes.

Exporters in Small Scale Industry (SSI) / Tiny Sector / Cottage Sector, Units registered with KVICs / KVIBs, Units located in North Eastern States, Sikkim and Jammu & Kashmir, Units exporting handloom handicrafts / hand knotted or silk carpets, exporters exporting to countries in Latin America / CIS / subSaharan Africa as listed in Appendix-9, Units having ISO 9000 (series) / ISO 14000 (series) / WHOGMP / HACCP / SEI CMM level-II and above status granted by agencies listed in Appendix-6 of HBP v1, exports of services and exports of agro products shall be entitled for double weight age on exports made for grant of status.

Post Export Benefits :

a) Duty Drawback Benefits

b) Duty Free Replenishment Certificate -DFRC

c) Duty Free Import Authorisation (DFIA)

d) Special Import Licence

e)  Served From India Scheme (SFIS)

f)  VKGUY Scheme

g) Status Holder Incentive Scrip (SHIS)

h) Agri-Infrastructure Scrip

i) Focus Product Scheme (FPS)

j) Market Linked Focus Product Scheme (MLFPS)

k) Agriculture And Village Industry Scheme

Export Marketing Goods benefits : -

a) Marketing Development Assistance

b) Air Freight subsidies on export of horticulture and floriculture products

c) Assistance for product promotion and packaging development schemes of the Spices Board

d) Subsidy Schemes of APEDA for agricultural, horticultural and meat products

e) Subsidy for the marketing of marine products.

Fiscal Benefits :

a) Exemption from Sales Tax

b) Exemption from Income tax Import Facilitation for Exports Purpose :

a) Export Promotion Capital Goods Scheme- EPCG

b) Duty Exemption Scheme – DES

c) 100% EOU /EPZ Unit / SEZ / STP/EHTP

Export Financing :

a) Pre-shipment finance at concessional rate of interest

b) Post-shipment finance at concessional rate of interest.

Foreign Currency Retention Account

a) Exchange Earner’s Foreign Currency Account

Exporters Recognition

a) Export House, Trading House, Star Trading House and Super Star Trading

b) International Service Export House, International Service Trading House, International Service Star Trading House and International Service Super Star Trading.

Duty Free Import Authorization (DFIA) Scheme : DFIA is scheme is in existence from 1st  May, 2006. A Duty Free Import Authorisation is  issued to allow duty free import of inputs which are used in the manufacture of the  export product (making normal allowance for wastage) and fuel, energy, catalyst etc. which are consumed or utilised in the course of their use to obtain the export product.

The Authorisation shall be issued on the basis of inputs and export items given under Standard Input and Output Norms (SION). The import entitlement shall be limited to the quantity mentioned in SION.

Such Authorisation can be issued either to a manufacturer exporter or merchant exporter tied to supporting manufacturer(s). A minimum 20% value addition shall be required for issuance of such Authorisation.

Once export obligation has been fulfilled, request for transferability of the Authorisation or the inputs imported against it may be made before the Regional.

Authority. Once, transferability is endorsed, the Authorisation holder will be at liberty to transfer the duty free inputs, other than fuel and any other item (s) notified by DGFT for this purpose. urse of their use to obtain the export product.

Zero Duty EPCG Scheme : Zero duty EPCG scheme allows import of capital goods (including CKD/SKD thereof as well as computer software systems) for pre-production, production and post-production at zero Customs duty, subject to an export obligation equivalent to 6 times of duty saved on capital goods imported under EPCG scheme, to be fulfilled in 6 years reckoned from Authorization issue-date.

Served From India Scheme (SFIS)
Objective of this scheme is to accelerate growth in export of services so as to create a powerful and unique ‘Served From India’ brand, instantly recognized and respected world over. All Indian Service Providers, of services listed in Appendix 10 of HBPv1, who have free foreign exchange earning of at least Rs. 10 Lakhs in preceding financial year / current financial year shall qualify for Duty Credit Scrip under SFIS. For Individual Indian Service Providers, minimum free foreign exchange earnings would be Rs 5 LakhsAll Service Providers shall be entitled to Duty Credit Scrip equivalent to 10% of free foreign exchange earned during current financial year. Entitlement / goods (imported / procured) against SFIS scrip shall be non transferable (except within group company and managed hotels) and be subject to Actual User condition.

VKGUY Scheme
Objective of VKGUY is to promote exports of :
(i) Agricultural Produce and their value added products;
(ii) Minor Forest Produce and their value added variants;
(iii) Gram Udyog Products;
(iv) Forest Based Products; and
(v) Other Products, as notified from time to time.
Duty Credit Scrip benefits are granted with an aim to compensate high transport costs, and to offset other disadvantages. Exporters, of products notified in Appendix 37A of HBPv1, shall be entitled for Duty Credit Scrip equivalent to 5% of FOB value of exports (in free foreign exchange) for exports made from 27.8.2009 onwards. Flowers, Fruits, Vegetables and other products, as listed in Table 2 of appendix 37A shall be entitled to an additional duty credit scrip equivalent to 2% of FOB value of exports.

Status Holder Incentive Scrip (SHIS)
With an objective to promote investment in up gradation of technology of some specified sectors , Status Holders exporting products of these sectors shall be entitled to incentive scrip @1% of FOB value of exports in the form of duty credit. The Status Holders Incentive Scrip shall be with Actual User Condition and shall be used for imports of capital goods related to the sector.

Agri-Infrastructure Scrip
For exports made during a particular year, all Status Holders exporting products covered under ITC HS Chapters 1 to 24, shall be incentivized with duty credit scrip equal to 10% of FOB value of agricultural exports (including VKGUY benefits entitled under Policy Para 3.13.2) provided that the total benefits for all status holders put together does not exceed Rs 100 Cr (i.e. Rs 50 Cr for each half year). Zonal Office, CLA, New Delhi is the licensing office for grant of this benefit to all status holders of the country.

Focus Market Scheme (FMS)

Objective of this scheme is to offset high freight cost and other externalities to select international markets with a view to enhance India’s export competitiveness in these countries. Exporters of all products to notified countries (as in Appendix 37C of HBPv1) shall be entitled for Duty Credit Scrip equivalent to 3% of FOB value of exports (in free foreign exchange) for exports made from 27.8.2009 onwards

Focus Product Scheme (FPS)
Objective is to incentivise export of such products which have high export intensity / employment potential, so as to offset infrastructure inefficiencies and other associated costs involved in marketing of these products. Exports of notified products (as in Appendix 37D of HBPv1) to all countries (including SEZ units) shall be entitled for Duty Credit scrip equivalent to 2% of FOB value of exports. However, Special Focus Product(s) /sector(s), covered under Table 2 and Table 5 of Appendix 37D, shall be granted Duty Credit Scrip equivalent to 5% of FOB value of exports. Further, Focus Product(s) / sector(s) that are notified under Table 7 of Appendix 37D shall be granted Additional Duty Credit Scrip equivalent to 2% of FOB value of export.

Market Linked Focus Product Scheme (MLFPS)
Export of Products/Sectors of high export intensity / employment potential (which are not covered under present FPS List) would be incentivized at 2% of FOB value of exports (in free foreign exchange) under FPS when exported to the Linked Markets (countries), which are not covered in the present FMS list.

 AGRICULTURE AND VILLAGE INDUSTRY SCHEME)

Objective 3.13.1 Objective of VKGUY is to promote exports of :
(i) Agricultural Produce and their value added products;
(ii) Minor Forest Produce and their value added variants;
(iii) Gram Udyog Products;
(iv) Forest Based Products; and
(v) Other Products, as notified from time to time.
Such products shall be listed in Appendix 37A of HBPv1.

Entitlement
3.13.2 Duty Credit Scrip benefits are granted with an aim to compensate high transport costs, and to offset otherdisadvantages. Exporters, of products notified in Appendix 37A of HBPv1, shall be entitled for Duty Credit Scrip equivalent to 5% of FOB value of exports (in free foreign exchange) for exports made from 27.8.2009 onwards, unless a specific date of export / period is specified by public notice / notification. However, for exports made w.e.f  27.8.2009, some Flowers, Fruits, Vegetables and other products, as listed in Table 2 of Appendix 37A shall be entitled to an additional duty credit scrip equivalent to 2% of FOB value of exports; over and above the 5% or 3% VKGUY reduced rate entitlement available as per Para 3.13.3 below.

Applicability of Reduced Rate
3.13.3 Duty Credit Scrip benefits under VKGUY scheme shall be granted only at a reduced rate of 3% of FOB value of exports in such cases where exporter has also availed benefits of:

(i) Drawback at rates higher than 1%; and/or (ii) Specific DEPB rate (i.e. other than Miscellaneous Category – Sr. Nos. 22D & 22C of Product Group 90); and/or 37

(iii) Advance Authorization or Duty Free Import Authorization Import of inputs (other than catalysts, consumables and packing materials) for the exported product for which Duty Credit Scrip under VKGUY is being claimed.

Agri. Infrastructure Incentive Scrip
3.13.4 For exports made during a particular year, all Status Holders (having status recognition for the current year) exporting products covered under ITC HS Chapters 1 to 24, shall be incentivized with duty credit scrip equal to 10% of FOB value of agricultural exports (including VKGUY benefits entitled under Policy Para 3.13.2) provided that the total benefits for all status holders put together does not exceed Rs 100 Cr (i.e. Rs 50 Cr for each half year) and the conditions specified in Para 3.4 of HBPv1 are satisfied.
Zonal Office, CLA, New Delhi shall be the licensing office for grant of the benefit to all status holders.

The following capital goods / equipments shall be permitted for import:
(i) Cold storage units (including Controlled Atmosphere (CA) and Modified Atmosphere (MA) Stores); Pre-cooling Units and Mother Storage Units for Onions, etc.;
(ii) Pack Houses (including facilities for handling, grading, sorting and packaging etc.);
(iii) Reefer Van / Containers; and
(iv) Other Capital Goods / Equipments as may be notified in Appendix 37F.

Imported capital goods/equipment shall be utilized for storage, packing etc. (as in (ii) above) and transportation of agricultural products (including agro-processed perishable products).

However, for import of Cold Chain Equipment, this Incentive Scrip shall be freely transferable amongst Status Holders as well as to Units (the term ‘‘Units’ shall not include Developers) in the Food Parks.

OTher Benefits :  Gem Rep

Exporters of Gems & Jewellery can source duty free inputs such as Gold, Silver, Platinum, mountings, findings, rough gems, precious &
semiprecious stones etc. in accordance with procedures spelt out in Chapter 4 of FTP and HBP 2009-14. For this purpose, RBI has authorised agencies like MMTC Ltd., HHEC Ltd, STC, PEC,MSTC Ltd., STCL Ltd.

Diamond India Ltd., Gems and Jewellery EPC, Star Trading Houses (in Gems & Jewellery Sector), Premier Trading Houses and commercial banks etc. The exact items, the required value addition and wastage norms for the purpose of replenishment in this sector have been defined in Chapter 4 of FTP read with HBP 2009-14. Exporters may obtain gold/silver/platinum as an input for export products from nominated agencies either in advance or as replenishment after exports as per the procedures specified in the FTP/HBP 2009-14.

 



Export Import Guide - FREE DOWNLOAD

Send Us Email of  Your Feedback, We will provide better Online Exim Informations : contact@eximtutor.com

Protected by Copyscape Plagiarism Detector
Copyright ©2012-15 EXIMTutor.com. All rights reserved.