Page 256 - DMGT546_INTERNATIONAL_TRADE_PROCEDURE_AND_DOCUMENTATION

Unit 12: Export Incentives Schemes

India as an Automotive Hub Notes

Provision to allow import of new vehicles by auto component manufacturers for R&D
purposes without homologation is being introduced.

To further accelerate India’s emergence as an important centre for sourcing auto
components.

India as a Refuelling Stop

Supply of stores (food, beverages etc.) and refuelling of long distance flights has emerged
as a big business opportunity.

Such export of supplies brought on equal footing with other exports for claiming duty
neutralization benefits under various export promotion schemes.
This will enable India to offer competitive fuel prices and attract mid route stops for
international flights.

Benefit of Un-rebated Service Tax and FBT

Incidence of un-rebated service tax and Fringe Benefit Tax (FBT) on exports will be factored
in the various duty neutralization and remission schemes.

Details are being worked out and would be announced separately.
Trade Facilitation Measures

Interest for delayed payment of refunds would be made by the government to ensure
accountability and cut delays.
Fast track clearance procedure for units in EOUs. Now, units having physical turnover of
` 15 crore can avail of the facility of receiving goods and warehousing on self-declaration
basis.
Advance licencing liberalised where norms are not fixed.
Pre-shipment certificates in lieu of test report for faster clearances.
Source: Annual Supplement 2006 Foreign Trade Policy (2004-09)/ www.pib.nic.in
India’s exports are booming and the Government of India is following up this progress by
introducing new initiatives to further boost the exporters’ efforts. Exports reflect foreign exchange
earnings of a nation and therefore, it is imperative to provide full support and motivation to the
export community so that they can remain both active and competitive in the international
markets. This is more important for a growing economy like India. The WTO regime insists on
globalization, that is free flow of goods and services across physical borders of countries. India
is working very hard to liberalize its business activities to be able to keep in tune with international
forces. As a result, the current Foreign Trade Policy aims to promote exports at an unprecedented
rate. Indian exports have grown by an impressive 60% in the last two years, from 63 billion
dollars to 101 billion dollars. The winds of positive changes are beginning to show improvements
and the exporters in India are hopeful of more reforms, better facilities, sound incentive schemes
and aggressive promotional measures.
Let us now study the various incentives/exemptions available to exporters in India in greater
details:

Sales Tax/VAT Exemption
Excise Exemption

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