Duty Exception Scheme
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Transcript of Duty Exception Scheme
WELCOME
INTERNATIONAL BUSINESS
DUTY EXEMPTION SCHEME
AND TAX CONCESSIONS
Duty Exemption Scheme
Duty exemption scheme is an important
instrument for boosting exports.
The duty exemption scheme enables import
of inputs required for export production.
DUTY EXEMPTION SCHEME
DUTY FREE LICENCE DUTY ENTITLEMENT PASSBOOK
ADVANCE LICENCE
ADVANCE INTERMEDIATE LICENCE
SPECIAL IMPREST LICENCE
Duty Free Licence Advance licence Advance intermediate licence Special imprest licence
Advance Licence An advance licence is issued under duty exemption
scheme to allow import of inputs which are physically
incorporated in the export product.
Advance licence is granted to merchant exporter or export
manufactures for the import of input required for the
manufacture of goods without the payment of basic
customs duty with a corresponding export obligation based
on the value and quantity of export product.
Advance licence can be issued for :
1) Physical exports
2) Intermediate supplies
3) Deemed exports
An Advance Licence contains:
The names and description of items to be imported and
exported/supplied.
The quantity of each item to be imported or wherever the
quantity cannot be indicated, the value of the item shall be
indicated.
The aggregate CIF value of imports.
The FOB/FOR value and quantity of exports/supplies.
Conditions:
Manufacture exporter.
Merchant exporter, where the exporter
agrees to the endorsement of names of
supporting manufacturers on the relevant
duty exemption entitlement certificate.
Advance Intermediate Licence It is granted to manufacturer exporter for the
import of inputs required in the manufacture
of the goods to be supplied to the ultimate
exporter holding an advance licence/special
impress licence.
Special Imprest Licence
It is granted to the manufacturer/exporter for
the import of the inputs required in the
manufacture of goods to be supplied to EOUs /
EPZs / STPs / EHTPs for supply of capital
goods to the holders of licence under zero duty
EPCG scheme.
Duty Entitlement Pass Book
DEPB (Duty Entitlement Pass Book ) is an
export incentive scheme of Indian
government provided to Exporters in India.
Notified on 1/4/1997,
DEPB Scheme consisted of (a) Post-export
DEPB and (b) Pre-export DEPB.
The pre-export DEPB scheme was abolished w.e.f.
1/4/2000.
Under the post-export DEPB, which is issued after exports,
the exporter is given a duty entitlement Pass Book Scheme
at a pre-determined credit on the FOB value.
DEPB rates allows import of any items except the items
which are otherwise restricted for imports.
Diamond Gem & Jewellery Export
Promotion Schemes Exporters of gem and jewellery are eligible to
import their input by obtaining Reple (REP)
license and Diamond imprest licence for the
licensing authorities.
Tax concession Complete or partial exemption from taxes enjoyed by legal
and physical persons.
Tax concessions are established by the state In the socialist countries factors like form of ownership ,size
and source of income and personal tax paying category are taken into account in determining tax concessions.
Tax concessions are established to stimulate particular type
of production or manufacturing
Sales Tax/VAT Exemption
VAT at zero rate and full credit of input tax is
also available to a dealer directly selling to an
exporter provided the same goods are
actually exported
The exporter needs to provide the following documents as evidence of goods exported:
Copy of export contract or order from a foreign buyer
Copy of the customs clearance certificate
Copy of the commercial invoice issued to the foreign buyer
Copy of Bill of Lading/Air-Way Bill
Proof of payment from the foreign purchaser or letter of credit
Excise Exemption Excise is a tax on production or manufacture of
goods. It is a duty levied on the production of goods
and the liability of payment of excise duty arises
immediately upon manufacture of goods. In India,
excise duty is governed by the provisions of the
Central Excise Act, 1944.
Income Tax Concessions
Under Section 10A of the Income Tax Act,
1961 undertaking operating from a Special
Economic Zone (SEZ ) that manufactures
articles/things or computer software are
eligible for deduction of export profits.
For undertaking commencing operation from
the notified Special Economic Zones (SEZs) on
or after 1st April, 2002, the tax holiday is
available for a total period of seven assessment
years, comprising of a deduction of 100% of
export for five years followed by deduction of
50% of export profits for subsequent two years.
Import Concessions
The Government of India has several
schemes in place that allow the exporters to
import inputs/ capital goods at concessional
rates of import duty.
The schemes are discussed below:
Export Promotion Capital Goods Scheme
(EPCG)
Duty Free Import Authorisation Scheme
Duty Exemption Passbook Scheme (DEPB)
Duty Free Import Authorization Scheme
Conclusion
Reference
International Trade &Financial Environment
-M.K.Bhat
International Business
-Francis Cherunilam