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Unit 12: Export Incentives Schemes

Copy of Letter of Credit Notes
Copy of Confirmed Export Order
The exporter will also be required to execute a surety bond in a prescribed form by the authorities.
This bond works as a guarantee for safekeeping of the Statutory Forms issued to the exporter.

Note Once the application is accepted as being satisfactory, the sales tax office may order
issue of Form H to the exporter.
Now, for goods bought from a supplier, the exporter can issue an H Form instead of paying the
VAT. Form H will be filled by the exporter in triplicate. He will give two copies of the form to
the dealer and retain one copy with him. The exporter also needs to maintain a proper record of
Form H in the prescribed form/register. This record will have to be submitted to the STO in
prescribed time.
The supplier, on the other hand, can submit the following documents with his VAT return to
justify zero rating of his particular sale to the exporter:
Purchase order from exporter.
Form ‘H’.
Copy of Bill of Lading/Air-Way Bill
12.2 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.
Excisable goods can not be removed from the place of manufacture unless prescribed excise duty
has been paid. The manufacturer, whose unit falls under the purview of excise, needs to register
it with the excise office. The unit, once registered, needs to maintain records of production and
removal of goods as per the requirements of the excise rules.
Exports in India are exempt from the payment of excise duties. This is based on the internationally
practiced trend of keeping exports free from the burden of indirect taxation. Exporters can avail
excise clearance in the following ways:
Exports under Claim of Excise Rebate- As per Rule 18 of Central Excise Rules, exports are
eligible for full refund of excise duty paid on raw materials and finished products except
for goods exported to Nepal and Bhutan. Thus, under this scheme, the exporter first makes
payment of the total excise duty and later applies for full rebate as the goods have been
exported out of India. The exporter is not eligible for this rebate in case he has claimed
benefits under the Duty Drawback Scheme or CENVAT (Central Value Added Tax) Credit
under the CENVAT Credit Rules, 2002.
The exporter will first prepare the ARE-I/ARE-II forms in sextuplicate, giving all particulars and
declarations. The exporter will then deliver triplicate, quadruplicate, quintuplicate and
sextuplicate copies of ARE-I/ARE-II forms to the Superintendent of Central Excise having
jurisdiction over the factory or the warehouse, within twenty-four hours of the removal of the
consignment. The exporter would retain the original and duplicate copies for presenting along
with the consignment to the Customs Officer at the point of export.
The jurisdictional Superintendent of Central Excise shall examine the information contained in
ARE-I/ARE-II and verify the facts of payment of duty and other certificates/declarations made

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