Incentives for the Export of Goods & Services from India:
India is a Current Account deficit economy i.e. import into India is higher than the exports out of India. To maintain the delicate balance between outflow & inflow in the foreign currency, Government of India is giving incentives to the export out of India through no of Schemes. The objective of these schemes is to provide rewards to exporters to offset infrastructural inefficiencies and associated costs. This helps reducing the effective cost of the goods & services and thus providing them competitive edge in the International market.
These incentives are listed herein below:
1. Duty Drawback Scheme:
Duty Drawback Scheme is a Duties & Taxes compensating mechanism on the inputs used for the manufacturing/ merchandising of goods for exports to avoid cascading impact and to ensure export pricing to be competitive in the International Market. Under this scheme incentives of 1.9% to 2% is provided on the direct physical exports from India.
2. Export Incentives for product and Services
2.1 Merchandise Exports from India Scheme (MEIS)
Under this scheme incentives 2% or 3% or 5% of FOB value of notified goods produced/ manufactured in India and exported to notified markets
2.2 Service Exports from India Scheme (SEIS)
Under this scheme incentives 3% and 5% on the net foreign exchange earned from notiﬁed services in the form of duty credit scrips on compliances under Foreign Trade Policy of India.
3. Transport Marketing Assistance Scheme (TMA)
The “Transport and Marketing Assistance” (TMA) for specified agriculture products exported out of India to compensate the higher cost of transportation of export of specified agriculture products. This assistance at notified rates, is available for export of eligible agriculture products to the permissible countries, as specified from time to time.
4. Rebate of State & Central Taxes and Levies (RoSCTL) Scheme
The Ministry of Textiles has announced the Scheme called ‘Rebate of State and Central Taxes and Levies’ (RoSCTL) for Export of Garments and Made-ups
5. Remission of Duties & Taxes on Exported Goods (RoDTEP)
Certain taxes/duties/levies are outside GST, and are not refunded for exports, such as, VAT on fuel used in transportation, Mandi tax, Duty on electricity used during manufacturing etc. These would be covered for reimbursement under the RoDTEP Scheme. This is a replacement of MEIS Scheme.
6. Export House Certificate
Status holders are business leaders who have excelled in international trade and have successfully contributed to country’s foreign Trade.
The export performance will be counted based on FOB value of export proceeds realized during current and previous two FY Category Export Performance FOB / FOR Value
|One Star Export House||3 Million USD|
|Two Star Export House||25 Million USD|
|Three Star Export House||100 Million USD|
|Four Star Export House||500 Million USD|
|Five Star Export House||2000 Million USD|
For granting status, export performance is necessary in at least two out of three years.
For deemed exports, FOR value of exports in Indian Rupees shall be converted to US$.
Privileges of Status Holders
- Authorization and Customs Clearances for both imports and exports may be granted on a self-declaration basis;
- Input-Output norms may be ﬁxed on priority within 60 days by the Norms Committee
- Exemption from the furnishing of Bank Guarantee for Schemes under FTP, unless specified otherwise anywhere in FTP or HBP;
- Exemption from compulsory negotiation of documents through banks. Remittance/receipts, however, would be received through banking channels
- Two-star and above Export houses shall be permitted to establish Export Warehouses as per Department of Revenue guidelines