PROCEDURES AND DOCUMENTATION FOR AVAILING EXPORT INCENTIVES

 

Click here for latest update on Export assistance schemes in India

 

PROCEDURES AND DOCUMENTATION FOR AVAILING EXPORT INCENTIVES

 

Exports are given priority in India and enjoy lot of incentives. However, the major problem lies in the process of realizing them. Unfortunately, exporters have to approach multiple organizations for seeking sanction. Each organization prescribes its own exclusive method of documentation as well as procedure form the stage of submission of claim till sanction. The documentation and procedures are diverse with each incentive provided. This is not the end of their problems. Incentives are available at post-shipment stage but they are connected with the documents generated at the time of shipment. If exporter does not pay adequate care and attention at the time and stage of export shipment in providing complete and adequate information in the documents in a proper way, their claims for export incentives are adversely affected. It is essential to the exporters to plan carefully in respect of incentives, even at the time of shipment, though their benefits are available only after completion of the shipment.

In the absence of adequate planning, it will upset their fund flow and equally the total realization may not be remunerative for effecting exports. Exporters have to draw a suitable plan of action for claiming incentives in a timely manner to avoid delays and cuts in realization. Exporters have to understand the different procedural formalities, connected with multiple and diverse agencies. This would ensure proper compliance for availing of full benefit of incentives. In this area, Government has to rationalize the incentives by opening a single window approach for sanction of multiple claims.

TYPES OF INCENTIVES

Government of India has been endeavoring to develop exports through various financial and non-financial assistance and fiscal incentives to the exporters. They are divided in two categories. They are:

1. Incentive Linked to Export performance

(a) Duty Drawback(DBK)

(b) Excise Duty – Refund/Exemption

(c) Duty Free Replenishment Certificate

(d) Duty Entitlement Pass Book Scheme.

2. Duty Exemption Scheme

Advance License

3. Fiscal Incentives

(a) Sales Tax Exemption

(b) Income Tax Exemption

4. Claim for Rail Freight Rebate

5. Claim for Air Freight Assistance

DOCUMENTATION AND PROCEDURE FOR CLAIMING INCENTIVES

 

Click here for latest update on Export assistance schemes in India

 

The procedure for claiming these incentives is different for different incentives.

Duty Drawback (DBK)

PROCEDURES AND DOCUMENTATION FOR AVAILING EXPORT INCENTIVESThe duty drawback 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 export.

Whom to Apply: The customs house in whose jurisdiction the exporter’s factory or warehouse is situated.

When to Apply: An exporters is entitled to claim the duty drawback as soon as the export of goods is completed. Delivery of goods at the port of destination is not essential. Export’ for the purpose of claiming duty drawback is evidenced by “Let Export Order”. Claim application is to be submitted with in a period of three months from the date of “Let Export Order”, issued by the Customs Officer. The exporter can seek extension of period for submission of claim. The Assistant Commissioner can grant extension for a period of three months, if he is satisfied that the exporter is prevented from submitting the application.

When Samples are Drawn: In case, any sample has been drawn from the shipment of goods to determine the contents of the basic materials for fixation of drawback, the sample report is be given to the exporter within a period of one month from the date of taking the sample. This report is to be submitted along with other relevant documents for submitting the claim. Delay in giving the report will be added to the period allowed for submission i.e. three months period. For example, if the sample report is given after one month and twenty-five days, the exporter can submit the claim within three months and twenty-five days, in addition to the discretionary extension period of three months.

Drawback Rates: The Government of India announces the rates of duty drawback every year on 31st May, product wise in the drawback schedule. Generally, the rates are expressed as a percentage of the FOB value of the goods exported. All such rates are called All Industry Rates. The rates are made effective from 1st June of every year. In case, duty drawback rate is not announced for a particular product, the manufacturer/exporter is known as Brand Rate. In case, the rate of duty drawback is less than 80% of the duties paid, the exporter can submit an application for suitable upward revision. This is known as Special Brand Rate. The application is to be submitted to Directorate of Duty Drawback Ministry of Finance.

When Duty Drawback not Admissible: Duty drawback is admissible for the export of all the notified products. However, in the following cases, it is not admissible:

(a) No excise/customs duty is paid for the manufacture of export product

(b) Amount of drawback is less than 1% of the FOB value of the goods. However, if the amount of drawback is more than Rs.500, it can be claimed

(c) If the export proceeds are not realized within six months

(d) If the amount of foreign exchange spent on the inputs used for the export is more than the foreign exchange value of the exports. In other words, value addition is negative

(e) Cenvat Credit is availed of

How to File Claim: The procedure for claiming duty drawback depends upon whether the processing of shipping documents has been computerized or not. The exporter is not required to file any separate application for claiming duty drawback, if the processing of documents has been computerized at the jurisdiction customs station. Where processing has not been computerized, separate application is to be submitted for claiming duty drawback. Triplicate copy of the shipping bill becomes the application only after the Export General Manifest is filed.

 

Documents to be submitted: The following documents are to be submitted to the Directorate of Duty Drawback:

(a) Triplicate copy of the Shipping Bill

(b) Copy of bank attested invoice

(c) Copy of Packing List

(d) Copy of Bill of Lading/ Airway Bill

(e) Copy of ARE-1 form, where applicable

(f) Insurance Certificate, where necessary

(g) Copy of the Test Report, where required

(h) Copy of communication regarding Special Brand Rate fixation

(i) Copy of the export contract or letter of credit as the case may be

(j) Pre-receipt for drawback claim

How Claim Amount is paid: The Customs House that has the jurisdiction over the port or airport through which exports are affected makes the payment.

How Delay in Payment of Claim is avoided: when the claim application along with complete set of documents is submitted, an acknowledgement in the prescribed form is issued to the exporter within 15 days from the date of filing the claim. The duty drawback is to be paid to the exporter within a period of two months from the date of acknowledgment. In case of delay, interest @15% per annum is paid for the period of default. Due to compulsory interest provision, normally, claims are settled in time.  Click here for latest update on Export assistance schemes in India

 

 


The above information is a part of Import Export Training course online


 

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Comments


preeti: nice

shrisha: is it possible for me to claim drawback without TIN number..? Thanks in advance...

NORBERT ALPHONSO: Sir, We are manufacturing molds by assembling imported parts, can we claim duty drawback under sec 74 and also the entire mold can be claimed under EPCG under the same shipping bill. (can we claim two separate benefits under one shipping bill)

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SATYA PATRUDU: DEAR SIR, CAN YOU PLEASE HELP ME OUT IS THERE ANY SPECIFIC FORMAT OF APPLICATION FOR CLAIMING DUTY DRAW BACK THANKS SATYA

Sandeep: Dear Sir/ Madam, Greetings!! Please send details, what are the Export Incentives & Promotional Schemes are available for A) Merchant Exporter & B) Manufaturer. Regards, Sandeep

PRAKASH HS: Dear Sir, We are registered central excise firm and availing MODVAT on input including the goods meant for export. My question is whether we are eligible for export incentives even after using / caliming MODVAT credit?

Sajal Goyal : I have one query regarding import and export. Pls help me out. I am working in 'A' company in registered in india. and we have another company 'B' which is registered in Singapore. Both are subsidiaries of ultimate holding company 'C'. My company 'A' takes a order in india from 'X' in USD and billing them in USD. Goods handed over to them from 'B' warehouse to take directly to Bangladesh. Is it Ok? 'X' will make the payment to 'A' in USD. Can they do it? Please advise points to be taken care while doing these transactions. It will be great help. i am confuse on this part.

Admin: Hi Sajal Goyal, You may learn more about Special Valuation Branch (SVB) as per WTO norms which clearly explains this subject.

Jay Patel : I am an Accounts & Finance Manager at our new company stated below. We are Manufacturer-Exporters of Material Handling Equipments. Over the course of the year I have learned quite a lot of how to handle Commercial Export and Import Shipments, about SVB, FSP, Advance License etc.In the course of my hunt for more information, I came across your website and I have been following it regularly to improve my knowledge in this field.

Tejas C Gandhi: If Import material purchased against DBK Scheme than after take cenvat credit for only excise duty in cenvat register & for same after done export can get benifit of DBK claim

Saiyam Sharma: Sir, what is the basic difference between Duty Drawback and Duty Exemption in respect to input material used in manufacture for products to be exported.

Surendra dubey: what entry pass when exports incentive received from government and when sale or utilise

Govind Patel: Hi we are a manufacturer and would like to know procedure about brand rate DBK for exporting material through merchant exporter.

Abhijeet K: nice

Rasik Bihari: Presently i am working as Export Import Manager in AVS INTERNATIONAL PVT LTD,AGRA(U.P) I want to get good opportunity in Export Company please guide me for my future Please tell me any certificate course for my growth through which I can grow in my career

amit dava: We are willing to claim benifits of meis but we have not mentions it in invoice now is it possible to claim benifit our product hs code is 69089090 Please replay with process

Leo: Is the Customs Attested Ivoice mendatory for application of MEIS Licence???

Nilima Kamate: Dear Sir, Section 74 1. Which Documents we need to prepare for sending material under section 74. 2. What is the condition (material description) 3. Time period import and export 4. How Much % import duty we will received back under section74 5. Within what time we will received back duty payment 6. Can we get Duty Drawback & FPS (MEIS) benefit, If we send material under section 74 7. Any BG and other documents give it to customs????? Regards, Nilima Kamate 8380043342

Mahesh Motiani: Hi. I want to export plastic items. Please guide me how to do it and what will the encentives for plastic export on which terms and conditions

Arvind Kumar: I have to send some Goods to UK for that i want to know what is the procedure i have to follow and what is the charges i have to pay? Kindly give some suggestion.

Deekshith Menezes : Myself Deekshith I want to know about import duties and documents required so can please share it with me

Ethnic Silk Mills : We would like to clarify if their is any option for us to obtain an Advance Authorisation to procure raw materials for our production and export purpose since we are under exit process the authorities are not issuing any Procurement Certificates / CT3 for us till the process is completed. We are incurring huge financial loss by procuring raw material on merit duty. Please kindly clarify if there is any option to procure the material under Advance Licence and export the same during exit process.

Narayanan Unni. S: I would like to inform that I am very much interested to know export and import procedure and documentation, because i would like to start consultation regarding this.Before start , i have to know the procedure thoroughly .

Guru: Dear Sir / Madam , request clarify certain rules under Export schemes 1. Can two units , one under EOU and other under DTA can be in same business at a time, both in the same name of the company, but different manufacturing plants in the same campus ? In that case, can we import same parts for EOU as well as DTA at same time? However, we shall import parts thro' separate purchase orders, stock , use & account them separately. 2. I came across 'Annual Advance Licence can be obtained upto 300% of FOB value of exports'. If our export turn over is 10 Cr, can we import for 30 Cr under advance licence? This I ask considering our org is a DTA unit. If so, we can not meet PNFE - Positive Net Foreign Exchange. Is that ok ? Ty in advance Guru

Guru: Dear Sir / Madam , can an automobile company (car / motor cycle manufacturer) start an EOU ? Any restriction / exception . Thanks in advance Guru

mv krishna : My self M.Venkata krishna,From Hyderabad gone through your web site and iam interested to do export business.I can procure any material from Andra pradesh and Telangana states and interested to do with your organisation.Pl send the procedure to enter in to export business and terms and conditions. Iam already manufacturing building admixtures supplying to various Govt departments.www.concareplus.com.

Ankur Gupta : At the outset let me introduce my self very concisely. I, Ankur Gupta, am a struggling entrepreneur who recently quit his job and started a venture called doogdh nutraceuticals ltd. You can go through about me in detail from my pages as mentioned below for your assistance. Although, I am looking forward to startup a sub-nationalized or nationalized nutraceutical company sourced out of dairy and agriculture products. but very recently, I got an opportunity mail from one of the countries of European Union and JAPAN where in i was contacted through my website to export some easily available material (dried dairy product) from my location i.e. dist. darjeeling and near by places like nepal, bhutan and sikkim. I started communication with my client for the same. Talking with my CA, I started learning about Ex-IM process and initiated the application for IE-code and cst-VAT. But I am not clear with the process of exporting. If you could please help me in understanding.

amit gupta : i want to start a import export business in kolkata .so i want to know the procedure and process to setup. so i need ur help to complete

Jignesh: We read your artical on How to Export Import.com and would like to get further information on it. We are based in Dubai and currently have no base in India but we are looking to open an Import Export firm in India. We are looking to open it either in Gujarat or in Mumbai. As such we would like to know about the procedure & documents required to setup an IE firm and to get an IEC number at both locations.

Rishabh Singh : i want to import supplements from usa.can you guide me with the procedure and formalities

santhosh v: I am from chennai, i would like to import all kind of pets across the globe. I dont owe a shop, i am a hobbiest, request you to guide me to get the licence.

LAKSHMIKANTH RATHI: I AM LAKSHMIKANTH RATHI FROM HYDERABAD, WOULD LIKE TO KNOW THE PROCEDURE TO EXPORT AND IMPORT, WHAT IS THE PROCEDURE AND WHAT LICENCES SHOULD BE TAKEN FOR THIS, I USE TO SUPPLY SAFETY PRODUCTS TO INDUSTRIES, SO PLEASE GUIDE ME FOR NEW SETUP, TO EXPORT AND IMPORT.

Ashutosh pandya: My Self Ashutosh Pandya from The Gujarat. I want to Know about the Imp/xprt licence and what is the procedure for that. Export grocerry from India to America so just so help for that...

Bindhu Saji: Hi Lakshmikanth, You need to apply for IEC (Import Export Code) to start Import and Export, for this you should have Current account, valid address proof, ID proof, min 6 months transaction in Bank and so on. If you are papers are ok.. you will be alloted IEC number within 5 working days from JDGFT..

Bindhu Saji: Dear Mr.Ashutosh Pandya.. Free export from India for major grocery items arerestricted first decide what you want to export then i can advice you the procedures

Bindhu Saji: Mr.Santhosh V You can import any pets subject you should have IEC, and the pets should have passport, along with latest veterinary certificate issued by the export country along with valid health certificates to prove the PET is fine to be exported and Imported

Bindhu Saji: Mr.Rishabh Singh, Describe what suppliments you are planning to import is it health suppliment if so for human OR Animals..?

jitender sharma: Hi, Kinldy help me in understanding the procedure at the time of surrendering the MEIS benefit back to DGFT. Below is the scenrio... Shipment was exported in Nov 2015, recalled from customer in Aug 2016. Drawback amount has been surrendered back with interest till 31th August. Against this shipment License was issued and that too has been utilized, now under such circumstances how should we approach......

Dharminder Verma: Dear, I have submitted the documents for the refund of the Central Excise duty against exports. We are trader exporter. Excise deptt. objected for the mis match of the description in ARE-1, EXPORT INVOICE AND SHIPPING BILL. Actual mistake is of typing in the export invoice & packing list submitted. So when we have tried to represent the revised documents against their letter. they refused to entertain the documents and saying they shall issue the show cause notice. So please advise what to do ? Wether they can refuse to accept our reply or not.

Jaya Bhardwaj : I got your mail id through google on the page of How to ExportImport. I would like to know that How can I get registration on SEIC for Duty draw back Scheme. Please revert me when you feel free.

Jaya Bhardwaj : I would like to know that How can I get registration on SEIC for Duty draw back Scheme

Bhawendra Pati Tripathi : i have done shipment through manual shipping bill. After processing, DBK has been approved by Customs. Accordingly we have submitted submitted our bank details for DBK credit. However we are able to provide cancelled cheque since it is not issued against this particular account. Now the Customs is insisting to provide cancelled cheque for dbk credit. i need you help on subject issue. B.P.Tripathi

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