Various Incentives and Relief Offered to Exporters and Importers

A number of incentives and other relief are being offered to exporters and importers, the details of which are as under:

Duty drawback to exporters to neutralize Customs, Central Excise Duty and Service Tax suffered on inputs/inputs services used in manufacture of export goods.

Benefit of rebate of Central Excise Duty paid on exported goods is allowed under Rule 18 of the Central Excise Rules, 2002. Goods are also allowed clearance for export under bond for the same purpose under Rule 19 of the Central Excise rules, 2002. Further, refund of Cenvat Credit of duty suffered on inputs used in the manufacture of exported goods is allowed under Rule 5 of the Cenvat Rules, 2004.

 

In order to boost exports in garment sector, Government has provided various support measures. One such measure is duty free entitlement for import based on export performance, wherein manufacturers of textile and leather garments registered with their respective Export Promotion Council are allowed to import certain specified items duty free of value upto 5 per cent of the FOB value of the textile garments or 3 per cent of the FOB value of the leather garments, exported during the preceding Financial Year for use in the manufacture of garments for export by such manufacturer. Similarly, the incentives are also provided to the exporters of handicrafts, leather products including footwear; handlooms, cotton and man-made textile made-ups etc.

Duty exemption schemes (Advance Authorization/Duty Free Import Authorizations and Export Promotion Capital Goods (EPCG) as well as the incentive schemes (Merchandise Export from India Scheme and Service/Export from India Schemes) extended to exporters administered by Director General of Foreign Trade (DGFT), Department of Commerce.

Section 10AA of Chapter VI-A of the Income-tax Act, 1961 allows 100% deduction on profits and gains derived from export of certain articles or things subject to fulfillment of conditions prescribed therein. Further, exporters and importers are also eligible for claiming deductions in respect of profits and gains derived from such business as per provisions contained in Part D of Chapter IV (profits and gains of business or profession) and Chapter VIA (deductions to be made in computing total income).

Certain representations have been received by the Government regarding delay in tax refund to exporters from different exporters associations.

Timely issue of refunds has always been a matter of priority and concern for the Government. Field formations have been directed to ensure prompt and timely disbursement of rebate claims.

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