EXPORTS

FRAMEWORK
POLICY,SCHEMES
AND
PROCEDURES

9th November 2010

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 Taxes and Duties
Central: Basic customs duty, additional Customs
duty, special additional duty, education
surcharge, service tax ,CST.
State: VAT, Electricity duty, Octroi, Mandi Tax,
Turnover tax, Purchase tax, Luxary Tax,
Entertainment Tax, Entry Tax in lieu of Octroi.
Export Duty.
GST: CGST,SGST,IGST.

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 Service Tax Refund
18 services eligible for refund.
Details available at www.cbec.gov.in
Refund only for service tax paid on
specified services
Provided no CENVAT benefit has been
availed

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 Procedure
Manufacturer exporter to excise having
claim over factory
Others to excise having jurisdiction over
regd./head office
Before that STC is alloted to applicant
Claim to be filed within 1 year from export
from LEO
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 Procedure(Contd.)
No claim less than Rs 500
If claim is upto 0.25% of fob ,document or
application to be self certified
If claim is more than 0.25% of fob
,document or application to be CA
certified

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 Zero Rebating of Exports
No tax or duty on exports.( Export tariff
aberration)
No Excise duty or VAT on final product.
Rebating of service tax on output services
Other Central taxes refund through duty
refund/exemption schemes.
State Tax: Except VAT ,rest are not refunded.

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 IEC
Permanent Code issued by DGFT
Application Form
Fee of Rs 250
Copy of PAN
Copy of bankers Certificate
Declarations
Exempted Categories
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 BIN
Software generated at Customs

Transmission of IEC
15 digit
PAN FT 001 and so on

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 RCMC
Issued by Councils/Boards/Authorities
Form
IEC
Membership Fee

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 Shipping Bill

Shipping bill for export of goods under

claim for duty drawback/DEPB etc.
Shipping Bill for export of dutiable goods.
Shipping Bill for export of duty free goods.
(Free or White )
Shipping bill for export of duty free goods
ex-bond i.e. from bonded warehouse
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 Bank Certificate of Exports &
Realisation
Exports documents to be presented to bank
within 21 days
Advance payment and status holders
exempted
After negotiation Bank Certificate of exports
and subsequent to realisation banks issue
BRC
Required for claiming various benefits
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 Examination by Customs
Invoice
Packing list
ARE 1
Rule 18
Rule 19

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 ARE 1
Excise document for export clearance prepared
in quintuplicate . Bears running serial number
beginning from the first day of the financial year.
Original White
Duplicate Buff
Triplicate Pink
Quadruplicate Green
Quintuplicate Blue
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 MATE RECEIPT
An acknowledgement of cargo receipt
signed by a mate of the vessel.
The possessor of the mate's receipt is
entitled to the bill of lading, in exchange
for that receipt.

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 BILL OF LADING
A document issued by a carrier to a
shipper, acknowledging that
specified goods have been received on
board for delivery to the consignee
Evidence of a valid chartering contract
and may incorporate the full terms of the
contract between the consignor and carrier.

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 BOL
Receipt signed by the carrier confirming
goods matching the contract description
have been received in good condition
A document of transfer, being freely
transferable but not negotiable instrument
It governs all the legal aspects of physical
carriage and like a cheque or other
negotiable instrument may be endorsed
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 Straight /Order BOL
A straight bill of lading is a non-
negotiable document, made out to a
specifically named consignee
An Order bill of lading is a document that
is made out to the order of the foreign
importer / its bank/ export firm/ its bank, or
another designated party.

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 FT(D&R) Act
FT(D&R) Act repealed Import and Export
(Control) Act, 1947.

FT(D&R )Act, 1992 provide for

development and regulation of foreign
trade by facilitating imports and
augmenting exports .

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FOREIGN TRADE POLICY
Section 5 of Foreign Trade
(Development and Regulation) Act,
1992 empowers the Central
Government to notify the Exim (FT)
Policy.
Para 2.4 of Foreign Trade Policy
empowers DGFT to notify procedures

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 FOREIGN TRADE POLICY
2009-14
Basic objective
To double our global share of merchandise
and services exports by 2014.
Provide stability to Policy with continuation
of Schemes.
Diversify our product and market base.
Reduce transaction time and cost
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 Imports/Exports

All Imports/Exports are free except for the

items shown as Prohibited/Restricted/State
trading enterprises.

Import/Export permitted from/to any

destination .Import/export of arms and
related material from/to Iraq and North
Korea prohibited
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 Imports/Exports (Contd)

Prohibited goods:- Not allowed except in

exceptional cases with approval of Central
Government.
Restricted goods: May be allowed under a
licence or through a public notice.
STE goods:- May be imported/exported by
STE(s) or with a licence from DGFT.
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 Pre-requisite of Import/Export
Importer-Exporter Code (IEC):- Mandatory except for
exempted categories in paragraph 2.8 of Handbook of
Procedure
Documentation:- Application form with fee .
Copy of PAN.
Copy of bankers Certificate
Declaration regarding NRI interest

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 EXPORT PROMOTION
SCHEMES
Export Promotion Capital Goods Scheme.
Duty Exemption Scheme.
VKGUY
Focus Product, Focus Market and Market
linked Focus Product Scheme
EOU/SEZ Scheme
Status holder Scheme.
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 Export Promotion Capital
Goods Scheme
Import of capital goods at a concessional
basic customs duty of 0% for selected
sectors and 3% allowed(for all sector) for
export purposes. .
Spare ,Jigs ,fixture ,dies and moulds also
allowed.
Second hand CG without any age
restriction permitted under the Scheme.
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 Conditions of Exports
Export to be effected equivalent to 8 times (5
times for agro, cottage and tiny sector and 6 times
for SSI units)of the duty saved on capital goods .
Exports to be completed in 8 years/12 years time.
For Zero duty,6 times in six years.
12 years for duty saved> Rs 100 Cr , and units in
agro, cottage and tiny sector.

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Conditions of Exports (Contd)
Export of goods capable of being manufactured by
use of capital goods.
EO could be discharged by export of goods
produced in different manufacturing unit of the
company.
Facility to meet 50% of EO by exports of
additional items from the same company/group
companies permitted.

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 Duty Exemption/Remission
Scheme
Advance Authorisation.
Annual Advance Authorisation
Duty Free Import Authorisation .
Duty Entitlement Pass Book Scheme.
Duty Drawback Scheme

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 Advance Authorisation
Duty Free import of inputs allowed for
exports.
Minimum 15% value addition to be
achieved.
Exports/Imports to be completed in 24
months.
Bond / BG / LUT to be given to the Custom
Authorities.
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 Advance Authorisation
Advance License indicates description of
export items, quantity of export item, FOB
value of exports, description of import
items, quantity of import items and CIF
value of imports.
Import of inputs exempted from Basic
Customs duty, Additional Customs duty
and Safeguard/Anti-dumping duty.
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 Annual Advance
Authorisation
Available only to status holders and
exporters with 2 years exports.
Entitlement equivalent to 300% of the
FOB value or Rs 1 crore ,whichever more
in preceding year.
Authorisation valid for 24 months imp/
exports.

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 Annual Advance
Authorisation (Contd..)
Licence only mentions the export product
group, CIF value and FOB value.
Licence holder can export any product
falling under the product group including
items for which norms do not exist.
Only one licence for one product group or
port of registration.

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Duty Free Import Authorisation

New Scheme effective from 1st May,2006

Exporter allowed to import inputs free of
Basic Customs and or Additional /SAD
duty.
DFIA indicates names and quantity of the
raw-material to be allowed duty free.
Minimum value addition of 20% required.
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Duty Free Import Authorisation
(Contd.)
DFIA and/or material imported under it
transferable after completing EO.
Scheme covers only products for which
Standard Input Output Norms exist.
Additional Customs duty is refunded through
CENVAT or drawback in case of
transferabilty.
CENVAT permitted under the scheme.
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 Duty Entitlement Pass Book
Scheme
Substitution Drawback Scheme under ASCM
Aims to neutralize incidence of customs duty
on import content of export product,
Exporter entitled for credit at a pre-specified
rate of FOB value of exports.
Rates dependent on SION, value addition
and Basic Customs duty.

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 Duty Entitlement Pass Book
Scheme (Contd)
Credit can be utilised for import of items
otherwise freely importable except capital goods.
For edible oil debit could be only upto 50%
from DEPB.
Basic Customs duty, Additional Customs duty
debitble from DEPB .
Validity 24 months and upto the last day of the
month.

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 Drawback Scheme
All-Industry : for a product by all
companies /firms
Brand Rate :Exclusive to a company/firm
for a product
AIDBK not available
Refunds less than 4/5th of duties

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 Drawback Scheme(contd)
New Drawback Schedule notified from
17th Sept 2010
Most drawback rates are specific as against
ad-valorem
Drawback Schedule covers now about
1400 products.

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 VKGUY
Objective to promote agriculture, forest produce
and their value added forms, Forest produce and
Gram Udyog Products
Benefit of 5% transferrable duty free credit
entitlement for products given in App 37 A .
3%when exporter uses imported inputs under
Advance authorisation or claim DEPB/DBK of
over 1%.
EOUs not availing 10 B benefits also eligible.
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 Focus Market Scheme
To offset high freight cost and other
externalities to select international market.
Benefit of 3% transferrable duty free
credit entitlement for countries given in
App 37 C.
EOUs/STPs/EHTPs not availing 10 B
benefits also eligible.

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 Focus Product Scheme
To incentivise exports with high employment
intensity in rural and semi urban areas
Benefit of 2% transferrable duty free credit
entitlement for products given in App 37 D .
EOUs/STPs/EHTPs not availing 10 B benefits
also eligible.
Special Focus Products under table 2 and 5 to be
given 5%

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 Market Linked Focus Product
Scheme
Benefit is given on a product country
matrix
2% transferable duty free credit entitlement
for listed products to specified countries
Exclusivity: Only one of the benefit of
FMS,FPS,MLFPS or VKGUY can be
claimed.

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 Served From India Scheme
Accelerate growth of services exports and
create Served from India brand
All service providers with foreign exchange
earning of Rs 10 lakh and more eligible
.Individual with Rs 5 lakh forex earnings
also eligible.
Entitled for 10 % duty free credit of current
year forex earnings.
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 Served From India
Scheme(Contd.)
Duty free Credit to be used for imports of
capital goods office equipments, spares,
professional equipments, office furniture
consumables
Domestic procurement permitted
Not transferrable (except within Group Company
and Managed Hotels)

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 Export Oriented Units
Introduced in early 1981 (Prakash Tandon
Committee) to offer duty and control free regime
of export production without location binding.
Units for manufacturing and services (no trading
permitted)
Only projects having minimum investment of Rs
1 Cr in plant & machinery except specified
sectors.

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 Export Oriented Units (Contd)

Facilities:
Import/ Export all goods except prohibited
Exemption from IT under section 10B
Exemption from industrial licensing for SSI
items
100% FDI permitted through Automatic
route as applicable to SEZ.
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 Export Oriented Units (Contd)

100% of export earnings in EEFC

Export remittance within 12 months.
OBU to extend the credit on same terms as
extended to units in SEZ
DTA sale up to 50% of FOB value of
exports

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 Export Oriented Units (Contd)

NFEP to be positive over 5 years.

Supplies to these units deemed exports.
Re-imbursement of CST on goods
manufactured.
Remission of Service Tax
Exemption from excise on domestic
procurement
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 Special Economic Zones
Scheme announced in March, 2000.

Foreign territory for taxes and duties

Goods from DTA to SEZ exports, reverse process

imports.

Developers of SEZs eligible for tax/duty

exemptions
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 Special Economic Zones(Contd)

Facilities for developer:

IT exemption as per 80 IA of IT
Import/procurement of CG and inputs
without customs/excise duty
Exemption from CST
Exemption from Service Tax

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Special Economic Zones(Contd)

Facilities for units:

Import/ Export all goods except prohibited
Exemption from Income Tax
Exemption from industrial licensing for SSI
items
100% FDI permitted through Automatic
route .
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Special Economic Zones (Contd)

NFEP to be positive over 5 years

100% of export earnings in EEFC
Export remittance without any time limit.
OBU to extend the credit on international
benchmarks.
DTA sale without any limit subject to NFE
positive on applicable duties.
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 Special Economic Zones(Contd)

No interference from the Custom

Authorities inside the zone
Supplies to these units physical exports.
Exemption of CST on goods
manufactured.
Exemption of Service Tax

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 STATUS SCHEME
Category Total exports
during current plus
1/2/3 years
EXPORT HOUSE Rs 20 Cr
STAR EXPORT Rs 100Cr
HOUSE
TRADING HOUSE Rs 500 Cr
STAR TRADING Rs 2500 Cr
HOUSE

PREMIER TRADING Rs 7,500Cr

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HOUSE
 Facilities To Status Holders
Automatic issuance of Authorisation
100% in EEFC
Direct negotiation of documents
Fixation of Norms in 60 days
Exemption from BG.
Accelerated Customs clearance under ACP
Status Holder Incentive Scrip
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 Status Holder Incentive Scrip

Leather(excl finished),Textiles& Jute, Handicrafts

Engineering (except metals in primary or intermediate
forms, automobiles,two wheelers, nuclear reactors ,ship
boats and floating structures),Plastic and Basic
Chemicals(excl Pharma)

Incentive@1% for exports in 2009-10 , 2010-11and 2011-

12
Actual User for imports of capital goods
Beneficiary of TUF not eligible

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 Status Holder Incentive Scrip
New Products
1 Chemical & Allied Products (other than Bulk minerals, Granite/Stones,Processed minerals, Cement, Clinkers
and asbestos)
(i) Rubber products, 4001 to 4010,4014 to 4017
(ii) Paints, Varnishes & Allied Products 3208, 3209,3210
(iii) Glass and glassware Chapter 70
(iv) Plywood and allied products Chapter 44
(v) Ceramics / refractories Chapter 69
(vi) Paper, Paper Boards & Paper products Chapter 48
(vii) Books, Publications & Printings Chapter 49
(viii) Animal By-products (Codes35030030, , 05069099, 05079010,05079020, 05079050, 23011010,
23011090, 96062910, and 96063010)
(ix) Ossein & GelatineCodes05061039 and 35030020
(x) Graphite Products (Codes 3801,85451100 and 85451900) &
Explosives (Codes 3601, 3602 and 3603)
(xi) Misc. Products (Codes 3201,32029010, 32030010, 3604, 3605, &38021000)

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 Status Holder Incentive Scrip
New Products
Electronics Products
Sports Goods and Toys
Chapter 95and Codes420321,650610
Engineering products for the three groups indicated
below Chapter 72
(i) Iron and Steel
(ii) Pipes and tubes
(iii) Ferro Alloys

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THANK YOU ALL

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