Export Incentives in India

What are the various incentives available for exporters in India?

Government has come out with various initiatives to promote exports by way of providing duty drawbacks, refunds and other benefits through schemes like

• Merchandise Exports from India Scheme (MEIS): The scheme extends benefits to more than 5000 export items and the duty credit scrips are provided which help exporters in payment of Customs Duties for import of inputs or goods, payment of excise duties on domestic procurement of inputs or goods, payment of service tax on procurement of services.etc. All scrips issued under MEIS and the goods imported against these scrips are fully transferable. Government is planning to replace MEIS with ‘Remission of Duties or Taxes on Export Products’. Check your eligibility for duty credit scrips under MEIS – here
• Export Promotion Capital Goods Scheme (EPCG): This facilitates import of capital goods and spares required for pre-production, production and post-production at zero import duty for the purpose of production of export goods. EPCG license is provided if an exporter commits to export goods worth six times of duty saved under the scheme and this commitment is to be fulfilled in six years from authorisation issue date.
• Market Access Initiative Scheme: The scheme aims to provide financial guidance to eligible agencies for undertaking direct and indirect marketing activities like market research, capacity building, branding, and compliances in importing markets.
• Advance Authorization Scheme: Allows duty free import of those inputs which are used for making export products and in addition, fuel, oil, energy, catalysts which are consumed/utilised to obtain export product, may also be allowed.

Can you explain how ‘Remission of Duties or Taxes on Export Products’ (RoDTEP) scheme will benefit exporters?

Government is planning to cover all goods & services under the new RoDTEP scheme which will replace MEIS. The scheme is expected to provide the following benefits:

• Reimbursement of all taxes and duties paid on inputs including central and state indirect taxes which are currently not reimbursed
• Increased loan availability for exporters and provision of credit at reduced interest rates to MSMEs
• Tax assessment to become fully automatic for exporters as the businesses will get access to their refunds for GST via an automatic refund-route

Are there any incentives which are available for export of services?

Government of India provides incentives for exports of goods as well as services. Incentives for export of services are covered under Service Exports from India Scheme (SEIS). Under this scheme, service providers of notified services (Appendix 3E) are eligible for freely transferable duty credit scrip at 5% of net foreign exchange earned. The duty credit scrips issued under SEIS can be used for payment of various taxes levied on goods and services. These scrips are also freely transferable and can also be easily sold to some other assessee.

How can the recently announced NIRVIK scheme give fillip to export credit?

The Ministry of Commerce introduced an Export Credit Insurance Scheme, NIRVIK to enhance loan availability and ease the lending process for exporters. The insurance cover guaranteed under the scheme is 90%, from the present credit guarantee of up to 60% loss. This enhanced cover will also ensure that Foreign and Rupee export credit interest rates will be below 4% and 8% respectively, for exporters.

The aim behind the scheme is to make Indian exports competitive and provide ease of doing business.