Export Benefits and Incentives in India
How does exports benefit to exporters in India? What are the financial assistance to exporters? Advantages of Exports in India? What are the different government schemes to exporters? How does bank help exporters financially? Different financial schemes and other supports of Export Promotion Councils. Who are the organizations and agencies supporting exporters in India and how?
The below mentioned export benefits, schemes, financial assistance and other support to exporters in India by government and other different agencies could be withdrawn or modified. The actual beneficiaries may reconfirm with the concerned authorities whether such export benefits are valid.
EXPORT FROM INDIA SCHEME
MEIS (Merchandise Exports from India Scheme)
MEIS scheme for exporters was introduced in recent Foreign Trade Policy of India 2015-20 by consolidating previous different schemes such as Vishesh Krishi Gram Udyog Yojana (VKGUY), Focus Product Scheme (FPS), Agri-Infrastructure Incentive Scrip), Market Linked Focus Product Scheme (MLFPS) etc with modification. MEIS scheme extends benefits to more than 5000 export items and the duty credit scrips helps exporters in payment of Customs Duties for import of inputs or goods, payment of excise duties on domestic procurement of inputs or goods, payment of service tax on procurement of services, payment of Customs Duty and fee etc. I have written detailed articles about MEIS scheme in this web blog and you may read in detail here.
SEIS (Service Exports from India Scheme)
The foreign Trade Policy of India 2015-20 introduced SEIS (Service Exports from India Scheme) for service exporters by modifying SFIS scheme of previous years by benefiting all service providers of India including foreign brand of Indian Companies. Detailed articles about SEIS have been written in this web blog, you may click here to read.
ASSISTANCE FROM TRADE PROMOTION COUNCILS AND COMMODITY BOARDS
Trade promotion council of different products and commodity boards helps exporters with various financial schemes and other service assistance. Market Development Assistance (MDA), Market Assistance Initiative (MAI), Financial support to attend Trade Fairs, various information supports etc. are some of them. Click here for details.
You may also contact concerned trade promotion council and commodity board for more details.
DUTY EXEMPTION AND REMISSION SCHEME FOR EXPORTERS:
Advance Authorization Scheme (AA scheme):
As per foreign trade policy of India, inputs are allowed to import without duty payment for export purpose. The licensing authority fixes value addition on export products not below 15%. A stipulated period to import is allowed and validity for export obligation. For more details, contact nearest DGFT office (Director General of Foreign Trade, Government of India). I have mentioned a short note on Advance Authorization Scheme in this web blog separately, you can click here to read. Advance Authorization for annual requirement is also issued for items having standard input output norms those exporters having past export performance, minimum preceding two financial years.
Export Duty Drawback of Customs, Central Excise and Service Tax
Duty paid inputs against exported products is refunded to exporters in the form of Duty Drawback. If the rates of such items are scheduled under Drawback schedule, the amount of drawback is refunded accordingly. If not scheduled, a separate application has to be filed to fix Brand Rate. Detailed articles on Duty Drawback and Brand rate are available in this web blog with method of claim. Procedures to claim duty drawback
Brand rate under Duty Drawback for Exporters
If Duty Drawback rate has not been mentioned in schedule, exporters can approach concerned authority for Brand rate. The detailed article is available in this website, click here to read : What is Brand rate? Procedures to claim Brand rate
Rebate of Service Tax through all industry rates for Exporters
Service tax refund paid is reimbursable on specified output services used for export of goods at specified all industry rates fixed time to time by the authority.
EXPORT BENEFIT OF DUTY FREE IMPORT AUTHORIZATION
DFIA (Duty Free Import Authorization) scheme is the export scheme introduced by DGFT by clubbing DEEC (Advance License) and DFRC to support exporters for free import of inputs. I have written a separate updated article in detail about Duty Free Import Authorization (DFIA). You may click here to read.
DEPB, ANOTHER ADVANTAGE TO EXPORTER
DEPB (Duty Entitlement Pass Book) scheme is another export incentive scheme in India. At present, DEPB can be claimed post export. Import customs duty credit is allowed to exporters to neutralize the customs import duty against export of goods. Also read Can DEPB/DEEC bill can be converted to Drawback
EPCG SCHEME TO PROMOTE EXPORTS
Export Promotion Capital Goods (EPCG) scheme helps exporters to import capital goods with zero import duty for the purpose of production of export products with a commitment of export obligation period with licensing authority. Certain rate of relaxation is allowed to sell in local market after fulfilling export obligation. A detailed article about EPCG (Export Promotion Capital Goods) can be read in this website. How does EPCG work? EPCG under new Foreign Trade Policy 2015-20 Difference between EPCG and ECGC
CENTRAL EXCISE REBATE OF DUTY FOR EXPORTERS
Rebate of duty paid on excisable goods exported or duty paid on the material used in manufacture of such export goods may be claimed. Also read: Procedure for Central Excise Clearance Under Claim of Rebate
CENTRAL EXCISE DUTY EXEMPTION ON EXPORTS
Excisable goods are exempted to pay export excise duty with simple procedures with central excise department. Necessary registration of premise, factory or warehouse is required to be completed with concerned central excise department by executing bond. Click here to read Central Excise clearance procedures
DEEMED EXPORT BENEFITS
Deemed Export transactions are those transactions in which the goods supplied do not leave the country and the payment for such supplies is received either in Indian rupees or in free foreign exchange. You may go through this link to know in detail about Deemed Exports. Deemed exporters get benefit of refund of excise duty paid on final products, Duty drawback, imports under DEEC scheme, Special import licenses based on value of deemed exports etc. Click here to learn more about Deemed Exports
INCOME TAX BENEFITS FOR EXPORTERS
Income tax exemption to exporters are allowed by government in different categories. You may contact your nearest Income Tax Department to know latest updated information on income tax exemptions to exporters in India.
SALES TAX / VAT EXEMPTION TO EXPORTERS
No sales tax is required to pay for exports. The facility is extended to the suppliers of goods for export also. Value Added Tax (VAT) is also exempted for export goods. The details of such exemption of sales tax / VAT is available with the concerned Sales Tax Department. Read more How to get exemption of Sales Tax under exports Is sales tax applicable on shipments effected under high sea sales How does CENVAT Credit work?
Trade Promotion Programme, Focus LAC
BILATERAL TRADE AGREEMENTS BENEFITS TO EXPORTERS
Trade Agreement between countries promote exports each other by providing different special schemes to exporters. Click here to read about Bilateral Trade Agreements Difference between Multilateral Trade Agreements and Bilateral Agreements
POST OFFICE CLEARANCE FACILITY TO EXPORTERS
Post office clearance facility is also available for exporters who would like to export/import clear the goods in India. Read more: Procedures to claim under MEIS scheme under Export of goods through courier or foreign post offices
BANK ASSISTANCE FOR EXPORTERS
Many financial assistances with different schemes are given to exporters to boost exports in India. Pre Shipment Credit in Foreign Currency (PCFC) and in INR, Packing Credit loans, Supplier’s credit, Buyer’s credit, Post shipment Finance, short term and long term finance, Finance for special export projects, Working capital finance, Capital Equipment Finance, Fund for export consultancy and technological services, different guarantees for exports like Advance Payment Guarantee, Performance Guarantee, Retention Money Guarantee, Guarantee for customs, central excise and other government and private agencies etc. Banks also provide financial assistance to Export Oriented Units (EOU), Special Economic Zones (SEZs), Corporates, STPs, EHTPs, FTZs, MSMEs etc. Bank also provides Line of Credit mechanism for export of projects, equipment, goods and services from India.
Authorized banks also provide exporters to open Foreign currency account in the form of EEFC (Exchange Earners Foreign Currency) to help them in handling foreign currency easily without local currency fluctuation and to eliminate currency conversion charges. Many other services are also provided to exporters in India by authorized banks to boost exports for favourable balance of payments.
ECGC (EXPORT CREDIT GUARANTEE CORPORATION)
Export Credit Guarantee Corporation (ECGC) protects exporters in covering credit risk of overseas buyers. Click here to read more.
FEDERATION OF INDIAN EXPORTERS ORGANISATION
FIEO also plays a major role in promoting exports in India by assisting exporters in various ways.
EXPORT SUPPORT FROM CHAMBERS OF COMMERCE
Chamber of Commerce at different parts of the country and Federation of Indian Chamber of Commerce and Industry (FICCI) help exporters in various ways to promote exporters in earning foreign currency to strengthen economy.
EXPORT ASSISTANCE FROM INDUSTRIES’ ASSOCIATIONS
The support from Exporters Organization formed privately also plays a major role in sharing practical problems facing by industry and helps to find solutions. Such exporter’s association takes up their issues with government time to time, so as to enable the government to introduce new policy or to amend existing one.
CENTRAL ASSISTANCE TO STATES FOR EXPORTS (ASIDE)
Assistance to States for Infrastructural Development for Exports (ASIDE) has been introduced by Central Government with an objective to involve States / Under Takings in export effort by providing assistance to the State Governments or State Under Takings Administrations for creating appropriate infrastructure for development and growth of exports.
TOWNS OF EXPORT EXCELLENCE (TEE)
India government declared a list of towns of export excellence where specialized export products are promoted. Click here to know towns of export excellence
BENEFITS TO SPECIAL GROUP OF EXPORTERS
BENEFITS FOR EXPORTERS FROM CERTAIN REGIONS
Exporters and manufacturers from special region such as Sikkim, Jammu and Kashmir etc. are given specific benefits by government. The exporters can contact the related government agencies for more details.
Export benefits to units having ISO 9000 (series) / ISO 14000 (series) / WHOGMP / HACCP / SEI CMM level-II and above status
Export units holding special status are also eligible for different exports benefits from government modifying time to time.
There are many schemes available for Micro Small and Medium Enterprises (MSME) and SSI (Small Scale Industries) including scheme to promote exports. You may approach concerned office. Benefits to MSME
Export benefits to Free Trade Zones (FTZ)
Export Units in Free Trade Zones can enjoy zero excise duty on goods manufactured for export purpose. Import customs duty is exempted for import of components used for manufacturing export goods. Domestic Tariff Area (DTA) sales up to certain rate is allowed.
Export Advantages for Electronic Hardware Technology Park (EHTP)
Advantages like Single point contact service, income tax benefits, DTA sales up to certain limit and many other export benefits can be enjoyed for units of Electronic Hardware Technology Park (EHTP)
Export benefits for Software Technology Parks
Many advantages like Foreign equity permission, income tax benefits, DTA sales up to certain limit and many other supports can be enjoyed for the units under STP.
Advantages to 100% Export Oriented Units (EOUs)
Import of second hand capital goods, re export of capital goods, income tax benefits, DTA sales up to certain limit and many other government assistances can be enjoyed by Export Oriented Units.
Export benefits to Bio Technology Park (BTP)
income tax benefits, re export of capital goods, DTA sales up to certain limit and many other conveniences can be enjoyed from different government and non-government agencies to BTP.
Export merits for Agri Export Zone(AEZs)
income tax benefits, re export of capital goods, DTA sales up to certain limit and many other export advantages can be availed for Agri Export Zone (AEZs)
Advantages of Electronic Hardware Technology Parks(EHTPs)
income tax benefits, re export of capital goods, DTA sales up to certain limit and may other export supports can be enjoyed by Electronic Hardware Technology Parks (EHTPs).
Export supports to Special Economic Zones
Government provides many benefits to Special Economic Zones in India to create an internationally competitive and smooth working environment for exports and thereby economic development of the country. Some of the advantages enjoyed by SEZ are single window clearance, free import of goods, exemption of customs duty for import of capital goods, consumables, raw materials, spares etc, reimbursement of CST, 0% income tax for 5 years, Foreign Direct Investment, exemption on MAT, Service Tax, DDT, CST, Service Tax, External commercial borrowing facility etc. and many more.
This post explains: How does exports benefit to exporters in India? What are the financial assistance to exporters? Advantage to exporters in India? What are the different government schemes to exporters? How does bank help exporters financially? Different financial schemes and other supports of Export Promotion Councils. Who are other organizations and agencies supporting exporters in India and how?
The above mentioned export benefits, schemes, financial assistance and other support to exporters in India by government and other different agencies could be withdrawn or modified. The actual beneficiaries may reconfirm with the concerned authorities whether such export benefits are valid.
Would you like to add more information on this post about export financial benefits and other assistance to exporters in India? Share below your comments
GST on Imports in India
Difference between CGST and SGST
What is SGST in brief?
What is IGST in brief?
What is CGST in brief?
A very brief description about GST
How to export goods from India?
How to get Export Order?
Export benefit schemes in India
Export procedures and documentation
Know HTS code (HS code) of your product
How to import goods to India?
Find ITC code of your product
Export benefit schemes from Export Promotion Councils
How to start Export Business?
How to get Export Orders?
What are the risks and solutions in Export Business?
How to overcome negative thinking in Exports Business?
How to send samples?How to prepare Export Invoice?
How to get certificate of origin?
How does letter of credit work?
Refund of Input Tax Credit (ITC) of GST, FAQ
Migration procedures for existing VAT payers to GST online in India
Refund of GST paid in India, FAQ
4 Conditions when applying for refund of Input Tax Credit (ITC) under GST
Enrolling an existing VAT taxpayers at the GST Common Portal
Difference between types of goods and services and types of GST
4 types of Goods and Services in India for GST rate
Difference between IGST on International goods and IGST on domestic goods.
Navigation controls to enroll with GST in India for existing VAT payers in IndiaHow is IGST calculated under Imports?
How is IGST rate on imports treated?
How to register a Digital Signature Certificate under GST in India.GST and e-Commerce Business, FAQ
Definition of E-Commerce under GST
How to identify the steps in enrolment process of a tax payer at the GST common portal.
TDS under GST, Frequently Asked Questions
Does Interest attract on GST Tax payment delay?
Step by step procedure to login with GST common portal in India
Mechanism of Payment of GST tax in India
Levy of late fee for GST Tax returns filing in India
I pay Service Tax on my services. But I am not sure how do I pay the new GST?
Notice to GST return filing defaulters
When to file Annual Return of GST online?