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ExporL PromoLIon ScIemes

Destination basis of taxation
WRemove domestic taxes on inputs
ncourage domestic value-addition
W7awback oI impo7t duties on goods (pa7ts, 7aw mate7ials, and capital
goods) used in expo7t activities
$ubsidize exports to improve competitiveness
W$ubsidies to oIIset cost disadvantages
Whidden costs oI domestic use7 cha7ges
WOthe7 costs
W$ubsidies in excess oI identiIied cost disadvantages
eed for xport Incentives
7he various incentives/exemptions available to
exporters in lndia in greater details:
O Rewa7d/Incentive $chemes
O Vishesh K7ishi And G7am Udyog Yojana (Vkguy) ($pecial Ag7icultu7e And
Village Indust7y $cheme)
O Focus Ma7ket $cheme
O Focus P7oduct $cheme
O $tatus Holde7 Incentive $c7ip
O Advance Autho7isation $cheme
O uty F7ee Impo7t Autho7isation $cheme
O uty Entitlement Passbook $cheme
O Cb[ect|ve |s to acce|erate growth |n export of serv|ces so as to create a powerfu| and un|que
'Served Irom Ind|a' brand |nstant|y recogn|zed and respected wor|d over
O Lnt|t|ement A|| Serv|ce rov|ders sha|| be ent|t|ed to Duty Cred|t Scr|p equ|va|ent to 10 of
free fore|gn exchange earned dur|ng current f|nanc|a| year
O L||g|b|e kem|ttances Iree fore|gn exchange earned through Internat|ona| Cred|t Cards and
other |nstruments as perm|tted by k8I for render|ng of serv|ce sha|| a|so be taken |nto account
for computat|on of Duty Cred|t Scr|p
O Imports A||owab|e
a) Duty Cred|t scr|p may be used for |mport of any cap|ta| goods |nc|ud|ng spares off|ce
equ|pment and profess|ona| equ|pment off|ce furn|ture and consumab|es
b) Ut|||zat|on of Duty Cred|t scr|p earned sha|| not be perm|tted for payment of duty |n case of
|mport of veh|c|es even |f such veh|c|es are free|y |mportab|e under I1C (nS)
c) In case of hote|s c|ubs hav|ng res|dent|a| fac|||ty of m|n|mum 3 0 rooms go|f resorts and
standa|one restaurants hav|ng cater|ng fac|||t|es Duty Cred|t scr|p may a|so be used for |mport of
consumab|es |nc|ud|ng food |tems and a|coho||c beverages
O L||g|b|||ty A|| Ind|an Serv|ce rov|ders of serv|ces ||sted |n Append|x 1 0 of n8v1 who have
free fore|gn exchange earn|ng of at |east ks 10 Lakhs |n preced|ng f|nanc|a| year ] current
f|nanc|a| year sha|| qua||fy for Duty Cred|t Scr|p
O Ine||g|b|e Serv|ce and Serv|ce rov|ders Serv|ces and Serv|ce rov|ders as ||sted |n ara61 of
n8v1 sha|| not be ent|t|ed for benef|ts under the SIIS scheme
O Non 1ransferab|||ty Lnt|t|ement ] goods (|mported ] procured) sha|| be non transferab|e
(except w|th|n group company and managed hote|s) and be sub[ect to Actua| User cond|t|on
O Cb[ect|ve of VkGU |s to promote exports of
(|) Agr|cu|tura| roduce and the|r va|ue added products
(||) M|nor Iorest roduce and the|r va|ue added var|ants
(|||) Gram Udyog roducts
(|v) Iorest 8ased roducts and
(v) Cther roducts as not|f|ed from t|me to t|me
O Lnt|t|ement Duty Cred|t Scr|p benef|ts are granted w|th an a|m to compensate h|gh transport
costs Lxporters of products not|f|ed |n Append|x 37A of n8v1 sha|| be ent|t|ed for Duty
Cred|t Scr|p equ|va|ent to S of IC8 va|ue of exports (|n free fore|gn exchange)
O App||cab|||ty of reduced rate Duty Cred|t Scr|p benef|ts under VkGU scheme sha|| be granted
on|y at a reduced rate of 3 of IC8 va|ue of exports |n such cases where exporter has a|so
ava||ed benef|ts of
(|) Drawback at rates h|gher than 1 and]or
(||) Spec|f|c DL8 rate (|e other than M|sce||aneous Category Sr Nos 22 C 22 D of roduct
Group 90) and]or
(|||) Advance Author|zat|on or Duty Iree Import Author|zat|on Import of |nputs (other than
cata|ysts consumab|es and pack|ng mater|a|s) for the exported product for wh|ch Duty Cred|t Scr|p
under VkGU |s be|ng c|a|med
O Io||ow|ng Lxports sha|| not be taken |nto account for Duty Cred|t Scr|p Lnt|t|ement
a) 1) Lxport of |mported goods covered under para 23S of I1
2) Lxports through transsh|pment mean|ng therby that exports or|g|nat|ng |n th|rd country but
transsh|pped through Ind|a
b) Deemed Lxpots
c) Lxports made by SL2 un|ts and
d) Items Wh|ch are restr|cted or proh|b|ted for export under schedu|e2 of Lxport o||cy |n I1C
O 1he fo||ow|ng cap|ta| goods ] equ|pments sha|| be perm|tted for |mport
(|) Co|d storage un|ts (|nc|ud|ng Contro||ed Atmosphere (CA) and Mod|f|ed Atmosphere (MA)
Stores) recoo||ng Un|ts and Mother Storage Un|ts for Cn|ons
(||) ack nouses (|nc|ud|ng fac|||t|es for hand||ng grad|ng sort|ng and packag|ng etc) (|||) keefer
Van ] Conta|ners and (|v) Cther Cap|ta| Goods ] Lqu|pments as may be not|f|ed |n Append|x 37I
O Cb[ect|ve |s to offset h|gh fre|ght cost and other externa||t|es to se|ect |nternat|ona| markets
w|th a v|ew to enhance Ind|a's export compet|t|veness |n these countr|es
O Lnt|t|ement Lxporters of a|| products to not|f|ed countr|es (as |n Append|x 3 7C of n8v1) sha||
be ent|t|ed for Duty Cred|t Scr|p equ|va|ent to 3 of IC8 va|ue of exports (|n free fore|gn
exchange) for exports made from 2 782009 onwards
O Ine||g|b|e Lxports Category
a) Supp||es made to SL2 un|ts
b) Serv|ce Lxports
c) D|amonds and other prec|ous sem| prec|ous stones
d) Go|d s||ver p|at|num and other prec|ous meta|s |n any form |nc|ud|ng p|a|n and studded
e) Cres and Concentrates of a|| types and |n a|| forms
f) Cerea|s of a|| types
g) Sugar of a|| types and |n a|| forms
h) Crude ] etro|eum C|| Crude ] etro|eum based roducts covered under I1C nS codes 2 709 to
2 71S of a|| types and |n a|| forms
O Cb[ect|ve |s to |ncent|v|se export of such products wh|ch have h|gh export |ntens|ty ]
emp|oyment potent|a| so as to offset |nfrastructure |neff|c|enc|es and other assoc|ated costs
|nvo|ved |n market|ng of these products
O Lnt|t|ement Lxports of not|f|ed products (as |n Append|x 37D of n8v1) to a|| countr|es
(|nc|ud|ng SL2 un|ts) sha|| be ent|t|ed for Duty Cred|t scr|p equ|va|ent to 2 of IC8 va|ue of
exports (|n free fore|gn exchange) for exports made from 2782009 onwards
O Market L|nked Iocus roducts Scr|p (MLIS) Lxport of roducts]Sectors of h|gh export
|ntens|ty] emp|oyment potent|a| (wh|ch are not covered under present IS L|st) wou|d be
|ncent|v|zed at 2 of IC8 va|ue of exports (|n free fore|gn exchange) under IS when exported
to the L|nked Markets (countr|es) wh|ch are not covered |n the present IMS ||st as not|f|ed |n
Append|x 3 7D of n8v1 for exports made from2782009 onwards
Stutos Holders Incentive Scrip
O Cb[ect|ve W|th an ob[ect|ve to promote |nvestment |n upgradat|on of techno|ogy of some
spec|f|ed sectors as ||sted |n ara 3164 be|ow Status no|ders sha|| be ent|t|ed to |ncent|ve
scr|p Q1 of IC8 va|ue of exports made dur|ng 2 009 10 and dur|ng 201011 of these
spec|f|ed sectors |n the form of duty cred|t
O L||g|b|||ty for products ||ke
1 Leather Sector (exc|ud|ng f|n|shed |eather)
2 1ext||es and Iute Sector
3 nand|crafts
4 Lng|neer|ng Sector (exc|ud|ng Iron Stee| Nonferrous Meta|s |n pr|mary or |ntermed|ate forms
Automob||es two whee|ers nuc|ear reactors parts and Sh|ps 8oats and I|oat|ng Structures
S |ast|cs and
6 8as|c Chem|ca|s (exc|ud|ng harma roducts)
O Cb[ect|ve An Advance Author|sat|on |s |ssued to a||ow duty free |mport of |nputs wh|ch are
phys|ca||y |ncorporated |n export product (mak|ng norma| a||owance for wastage) In add|t|on
fue| o|| energy cata|ysts wh|ch are consumed] ut|||sed to obta|n export product may a|so be
a||owed DGI1 by means of ub||c Not|ce may exc|ude any product(s) from purv|ew of
Advance Author|sat|on
O Advance Author|sat|on can be |ssued e|ther to a manufacturer exporter or merchant exporter
t|ed to support|ng manufacturer(s) for
|) hys|ca| exports (|nc|ud|ng exports to SL2) and] or
||) Intermed|ate supp||es and ]or
|||) Supp|y of goods to the categor|es ment|oned |n paragraph 8 2 (b) (c) (d) (e) (f) (g) (|) and
([) of I1
|v) Supp|y of 'stores' on board of fore|gn go|ng vesse|] a|rcraft sub[ect to cond|t|on that there |s
spec|f|c SICN |n respect of |tem(s) supp||ed
O EIIgIbIIILy: SucI AuLIorIsuLIon cun uIso be Issued Ior suppIIes mude Lo UnILed NuLIons
OrgunIsuLIons or under AId Progrumme oI LIe UnILed NuLIons or oLIer muILIIuLeruI
ugencIes und wIIcI ure puId Ior In Iree IoreIgn excIunge
O ExempLIons: Advunce AuLIorIsuLIons ure exempLed Irom puymenL oI busIc cusLoms duLy,
uddILIonuI cusLoms duLy, educuLIon cess, unLI- dumpIng duLy und suIeguurd duLy, II uny.
O VuIue AddILIon: Advunce AuLIorIsuLIons necessILuLe exporLs wILI u mInImum vuIue
uddILIon oI 1 %, excepL Ior ILems In Gems & JeweIIery secLor. ExporLs Lo SEZ UnILsJ
suppIIes Lo DeveIopers J Co-DeveIopers, IrrespecLIve oI currency oI reuIIzuLIon, wouId uIso
be covered
O SImIIurIIy duLy Iree ImporL oI spIces sIuII be permILLed onIy Ior vuIue uddILIon purposes
IIke crusIIng J grIndIng J sLerIIIzuLIon or Ior munuIucLure oI oIIs und oIeoresIns und noL
Ior sImpIe cIeunIng, grudIng, re-puckIng eLc.
O ScIeme: DA Is Issued Lo uIIow duLy Iree ImporL oI InpuLs, IueI, oII, energy sources,
cuLuIysL wIIcI ure requIred Ior producLIon oI exporL producL. DGT, by meuns oI PubIIc
NoLIce, muy excIude uny producL(s) Irom purvIew oI DA. TIIs scIeme Is In Iorce Irom
1sL Muy, zoo6
O EnLILIemenL: However, LIese AuLIorIsuLIons sIuII be Issued onIy Ior producLs Ior wIIcI
SLundurd npuL und OuLpuL Norms (SON) Iuve been noLIIIed. n cuse oI posL exporL
DA, u mercIunL exporLer sIuII be requIred Lo menLIon onIy nume(s) und uddress(s) oI
munuIucLurer(s) oI LIe exporL producL(s). AppIIcunL Is requIred Lo IIIe uppIIcuLIon Lo
concerned RA beIore eIIecLIng exporLs under DA
O VuIue uddILIon: A mInImum z o% vuIue uddILIon sIuII be requIred Ior Issuunce oI sucI
uuLIorIsuLIon, excepL Ior ILems In gems und jeweIIery secLor, Ior wIIcI vuIue uddILIon
wouId be us per purugrupI q A.z.1 oI HBP v1. Lems Ior wIIcI IIgIer vuIue uddILIon Is
prescrIbed under Advunce AuLIorIsuLIon ScIeme, sIuII be uppIIcubIe
O 1ransferab||ty Cnce export ob||gat|on has been fu|f|||ed request for transferab|||ty of
Author|sat|on or |nputs |mported aga|nst |t may be made before concerned kA
O Cnce transferab|||ty |s endorsed Author|sat|on ho|der may transfer DIIA or duty free |nputs
except fue| and any other |tem(s) not|f|ed by DGI1
O nowever for fue| |mport ent|t|ement may be transferred on|y to compan|es wh|ch have been
granted author|sat|on to market fue| by M|n|stry of etro|eum and Natura| Gas
O Cnce transferab|||ty |s endorsed |mports ] domest|c procurement aga|nst author|sat|on or
transfer of |mported |nputs ] domest|ca||y procured |nputs sha|| be sub[ect to payment of
app||cab|e add|t|ona| customs duty ] exc|se duty
O Wh||e endors|ng transferab|||ty author|sat|on wou|d bear a note as to ||ab|||ty of such
add|t|ona| customs duty ] exc|se duty nowever |n case where CLNVA1 fac|||ty has not been
ava||ed exempt|on from add|t|ona| customs duty] exc|se duty wou|d be ava||ab|e even after
endorsement of transferab|||ty on DIIA
O Cb[ect|ve Cb[ect|ve of DL8 |s to neutra||se |nc|dence of customs duty on |mport content of
export product Component of customs duty on fue| (appear|ng as consumab|e |n the SICN)
sha|| a|so be factored |n the DL8 rate
O Component of Spec|a| Add|t|ona| Duty sha|| a|so be a||owed under DL8 (as brand rate) |n case
of nonava||ment of CLNVA1 cred|t Neutra||sat|on sha|| be prov|ded by way of grant of duty
cred|t aga|nst export product
O Cred|t sha|| be ava||ab|e aga|nst such export products and at such rates as may be spec|f|ed by
DGI1 by way of pub||c not|ce Cred|t may be ut|||zed for payment of Customs Duty on free|y
|mportab|e |tems and]or restr|cted |tems DL8 Scr|ps can a|so be ut|||zed for payment of duty
aga|nst |mports under LCG Scheme
O 1ransferab|||ty DL8 and ] or |tems |mported aga|nst |t are free|y transferab|e 1ransfer of DL8
sha|| however be for |mport at spec|f|ed port wh|ch sha|| be the port from where exports have
been made Imports from a port other than the port of export sha|| be a||owed under 1kA
fac|||ty as per terms and cond|t|ons of Dok not|f|cat|on
O 2ero duty LCG scheme
O It a||ows |mport of cap|ta| goods for pre product|on product|on and post product|on
(|nc|ud|ng CkD]SkD thereof as we|| as computer software systems) at zero Customs duty
sub[ect to an export ob||gat|on equ|va|ent to 6 t|mes of duty saved on cap|ta| goods
|mported under LCG scheme
O Ava||ab|||ty 1he scheme w||| be ava||ab|e for exporters of eng|neer|ng e|ectron|c
products bas|c chem|ca|s pharmaceut|ca|s appare|s text||es p|ast|cs hand|crafts
chem|ca|s a|||ed products and |eather |eather products
O Va||d|ty Va||d|ty per|od for |mport of cap|ta| goods and prov|s|on for extens|on |n export
ob||gat|on per|od w||| be as separate|y prov|ded |n the n8v1 A|| other prov|s|ons
perta|n|ng to concess|ona| 3 duty LCG scheme under th|s Chapter to the extent they
are not |ncons|stent w|th the above prov|s|ons of zero duty LCG scheme sha|| be
app||cab|e to the zero duty LCG scheme a|so 1he zero duty LCG scheme w||| be |n
operat|on t||| 3132011
ConL..(EPCG) ScIeme
O Concess|ona| 3 duty LCG scheme a||ows |mport of cap|ta| goods for pre product|on
product|on and post product|on (|nc|ud|ng CkD]SkD thereof as we|| as computer software
systems) at 3 Customs duty sub[ect to an export ob||gat|on equ|va|ent to 8 t|mes of duty
saved on cap|ta| goods |mported under LCG scheme to be fu|f|||ed |n 8 years reckoned from
Author|zat|on |ssue date
O Custom Duty In case of agro un|ts and un|ts |n cottage or t|ny sector |mport of cap|ta| goods
at 3 Customs duty sha|| be a||owed sub[ect to fu|f|||ment of export ob||gat|on equ|va|ent to 6
t|mes of duty saved on cap|ta| goods |mported |n 12 years from Author|zat|on |ssuedate
O nowever |n respect of LCG Author|zat|on w|th a duty saved amount of ks 1 00 crores or
more export ob||gat|on sha|| be fu|f|||ed |n 12 years
O Cap|ta| goods sha|| |nc|ude spares (|nc|ud|ng refurb|shed] recond|t|oned spares) too|s [|gs
f|xtures d|es and mou|ds Second hand cap|ta| goods w|thout any restr|ct|on on age may a|so
be |mported under LCG scheme
ConL.(ConcessIonuI % DuLy EPCG scIeme)
O nowever |mport of motor cars sports ut|||ty veh|c|es]a|| purpose veh|c|es sha|| be a||owed on|y
to hote|s trave| agents tour operators or tour transport operators and compan|es
own|ng]operat|ng go|f resorts sub[ect to the cond|t|on that
(|) tota| fore|gn exchange earn|ng from hote| trave| tour|sm and go|f tour|sm sectors |n current
and preced|ng three ||cens|ng years |s ks 1 S crores or more
(||) 'duty saved' amount on a|| LCG Author|zat|ons |ssued |n a ||cens|ng year for |mport of motor
cars sports ut|||ty veh|c|es] a|| purpose veh|c|es sha|| not exceed S 0 of average fore|gn exchange
earn|ngs from hote| trave| tour|sm and go|f tour|sm sectors|n preced|ng three ||cens|ng years
(|||) veh|c|es |mported sha|| be so reg|stered that the veh|c|e |s used for tour|st purpose on|y A
copy of the keg|strat|on cert|f|cate shou|d be subm|tted to concerned kA as a conf|rmat|on of
|mport of veh|c|e nowever parts of motor cars sports ut|||ty veh|c|es] a|| purpose veh|c|es such as
chass|s etc cannot be |mported under the LCG Scheme
O Import of kestr|cted |tems of |mports ment|oned under I1C(nS) sha|| on|y be a||owed under
LCG Scheme after approva| from LIC at neadquarters
EPCG or projecLs
O An EPCG AuLIorIzuLIon cun uIso be Issued Ior ImporL oI cupILuI goods under ScIeme Ior
projecL mporLs noLIIIed by LIe CenLruI Bourd oI ExcIse und CusLoms under S.No. qq1 oI
CusLoms ExempLIon NoLIIIcuLIon No. z1Jzooz duLed o1.o.zooz
O ExporL obIIguLIon Ior sucI EPCG AuLIorIzuLIons wouIdbe eIgIL LImes (6 LImes Ior zero
duLy EPCG scIeme) oI duLy suved. DuLy suved wouId be dIIIerence beLween LIe eIIecLIve
duLy under uIoresuId CusLoms NoLIIIcuLIon und concessIonuI duLy under LIe EPCG
O EPCC for Retoil Sector: To creuLe modern InIrusLrucLure In reLuII secLor, concessIonuI
duLy beneIILs under EPCG scIeme sIuII be exLended Ior ImporL oI cupILuI goods requIred
by reLuIIers IuvIng mInImum ureu oI 1 ooo sq. meLers. SucI reLuIIer sIuII IuIIIII exporL
obIIguLIon I.e. 8 LImes oI duLy suved, In 8 yeurs
O L||g|b|||ty LCG scheme covers manufacturer exporters w|th or w|thout support|ng
manufacturer(s)] vendor(s) merchant exporters t|ed to support|ng manufacturer(s) and
serv|ce prov|ders
O Lxport romot|on Cap|ta| Goods (LCG) Scheme a|so covers a serv|ce prov|der who |s
des|gnated ] cert|f|ed as a Common Serv|ce rov|der (CS) by the DGI1 Department of
Commerce or State Industr|a| Infrastructura| Corporat|on |n a 1own of Lxport
Lxce||encesub[ect to prov|s|ons of Iore|gn 1rade o||cy]nandbookof rocedures w|th the
fo||ow|ng cond|t|ons
(|) LCG ||cence to be g|ven to the CS shou|d have a c|ear endorsement g|v|ng the deta||s
of the users and the quantum of Lxport Cb||gat|on (LC) wh|ch each user wou|d fu|f|||
(||) Such exports w||| not count towards fu|f|||ment of other spec|f|c export ob||gat|ons and
|||) Lach one of the users of the CS apart from the CS shou|d furn|sh 1 00 bank Guarantee
(8G) equ|va|ent to the|r port|on of duty foregone apport|oned |n terms of quantum of LC to
be d|scharged by them
TIunk You !!