Export Documents and Incentives

Main Export Incentives

1.

EPCG Scheme:
- Exporters are allowed to import capital
goods for purpose of export production.
- Concessional rate of duty of 3% or Zero
duty.
- Exporters have to fulfil export obligation of
8 times the duty saved within a period of 8
years.
- Both new and second hand goods are
allowed.

3.

Excise duty exemption:

- Export goods are exempted from excise
duty.
- Two systems of excise clearance:
Export under rebate: First duty is paid
and then refund is claimed.
Export under bond: Duty is not paid but
an indemnity bond is executed in favour of
excise authorities.

2.

Duty Drawback (DBK):

- Refund of customs duty paid on import of
raw materials, components and packing
materials used for export production.
- Also involves refund of central excise
duties paid on domestic materials used for
export production.
- Given on basis of FOB value of goods.
- Two different rates: All Industry rates and
Special rates.

4.

Sales tax exemption:

- Export goods are exempted from payment
of sales tax.
- Registration with sales tax authorities is
required.

5.

Octroi and Rail Freight Refund:

- Octroi refund from local authorities and rail
freight refund from railway authorities.

6.

Marketing Development Assistance (MDA):

- Large exporters are given MDA ranging
from 25-60% of actual expenses incurred.

7.

Market Access Initiative (MAI):

- Financial assistance to undertake market
studies.
- Assistance ranges from 25-100% of total
cost.

8.

9.

Duty free credit:

- Depending on FOB value of goods.
- In the form of duty free scrip which can be
used for payment of customs duty, excise
duty and service tax.
Special incentives to EOUs:
- Tax holiday for 10 years.
- Extra incentives to boost performance.

10.

Special incentives to SEZ units:

- 5 year tax holiday.
- Extension in credit period from 180 to 360
days.

DBK
DBK

is given on:
- Raw materials and components used in
export production.
- Irrecoverable wastages arising during
manufacturing.
- Materials used in packing finished export
products.
- Finished products.

 DBK

is not applicable when:

- Amount of dbk is less than Rs. 50.
- Goods have been used after manufacture.
- Goods are produced using imported or
excisable raw materials where duty has not
been paid.
- Products manufactured by 100% EOUs and
units in EPZs.
- DBK is less than 2% of FOB value of
exports.

 Rates

of DBK:
- All Industry rates: Applicable to all exporters
within an industry.
- Special rates: Given to particular units on
the basis of application to Ministry of
Finance.
Whom to apply: Nearest Customs House
When to apply: Within 60 days from obtaining
Let Export Order from Customs.

EPCG Scheme

Exporters are allowed to import capital goods for

purpose of export production.
Concessional rate of duty of 3% or Zero duty.
Export Obligation:
- In case of 3%, 8 times duty saved within 8 years
- In case of zero duty, 6 times the duty saved over
6 years
- CIF value of Rs. 100 crores or more, 12 yrs
- Units in agri-export zones and units under revival,
12 years.

 Who

are eligible:
Manufacturer exporter and merchant
exporters. Also service providers.
Capital goods means any plant, machinery,
equipment or accessories used for export
production directly or indirectly including
those required from replacement,
modernisation, technical upgradation or
expansion.

ASIDE Scheme
Assistance

to States for Infrastructure

Development for Exports.
Purpose: To encourage State governments to
participate in the promotion of exports from
their respective states.
Financial assistance from Central Govt. to
State Govts. For developing infrastructure.

 Criteria

for allocation: Gross exports and

Rate of growth of exports.
Components of scheme:
- State Component: 80% of funds
- Central component: 20% of funds for interstate projects, capital outlays of EPZs, export
promotion in NER (10% of funds).
Private participation in development of export
infrastructure is encouraged by giving
additional incentives.

Utilisation of funds:
- Roads connecting production centres with docks.
- Setting up Inland Container depots and Container
freight stations.
- Creation of New State Level Export Promotion
Industrial Parks.
- Equity participation in infrastructure projects
- Devt of minor ports and jetties.
- Stablising power supply.
- Any other activity as notified by Dept of Commerce

IRMAC Scheme
Industrial

Raw Materials Assistance Centre.

Purpose: To assist small units in procuring
raw materials at competitive prices and to
improve quality of production.
IRMAC imports raw materials in bulk and
supplies to small units at competitive prices.

 Benefits:

- Lower prices
- Better credit period
- Improved quality of raw materials
- Timely availability of raw materials
- Units can focus on production