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In addition, refinance facilities and guarantees are offered to banks and financial institutions, which provide finance to exporters.

These are provided by the RBI, IDBI and ECGC (Export Credit and Guarantee Corporation). 2. Export Insurance Export Credit and Guarantee Corporation offers a range of insurance policies to cover the risks of exporters; and special schemes have been formed for small-scale exporters. 3. Cash Compensatory Support: The objective of cash assistance scheme was to enable exporters to overcome price disparities and meet competition in foreign markets. The assistance was given against physical exports of specified products to registered exporters only. The scheme has been dispensed with. 4. Duty Exemption Scheme: Under this scheme customs and excise duties are not charged on raw materials, components, consumables and spares used for export production. Alternatively, the duty charged on these items is refunded after the output is exported. Therefore, the scheme is also known as duty drawback scheme. 5. Sales Tax Exemption: Central and States Sales Tax Acts exempt the sales made out of India from sales tax. An exporter can buy the goods for the purpose of exports without payment of sales tax against issue of Form H.

6. Market Development Association Government provides assistance to approved organizations, associations, export houses and other exporters in their overseas marketing activities. Such activities may relate to sending trade delegations and study teams, market studies, export publicity, advertisements abroad, participation in trade fairs and exhibitions and setting up of showrooms, etc. 7. Foreign Exchange: The RBI releases foreign exchange to exporters for conducting market survey for participation in exhibition, for purchasing foreign tender forms and for other export promotion efforts. 8. 100% Export Oriented Units: Such units can import capital goods, raw materials, components, consumables and spares under Open General License or without any import license. Financial institutions provide loans to such units at lower rates of interest. 9. Import against Replenishment Licenses Exporters are entitled to get these licenses to replenish raw materials and components used in the manufacture of exported products. These licenses are generally issued after exports have been made. But, in some cases, the licenses are available before exports take place. 10. Income Tax Incentives The domestic companies and noncorporate tax payer residents in India who incur any expenditure under


specified heads to facilitate or promote sales outside India are allowed a weighted amount of deduction in respect of such expenditure. This deduction is equal to 1&1/3 times the amount of the qualifying expenditure. The expenditures qualifying for the deduction are as follows: (a) Advertisement and publicity outside India in respect of goods and services on facilities dealt in provided in the course of business. (b) Obtaining information regarding markets outside India for such services, goods or facilities. (c) Distribution, supply or provision outside India of such goods, services or facilities. (d) Maintaining outside India of a branch office, agency for the promotion of sale outside India of such goods, service or facilities. (e) Preparation and submission of tenders for the supply or provision outside India of such goods, services or facilities and activities incidental thereto. (f) Furnishing to a person outside India, sample or technical information for the promotion of sales of such goods, services or facilities. (g) Performance of services outside India in connection with or incidental to the execution of any contract for supply outside India of such goods, services or facilities.