Page 268 - DMGT546_INTERNATIONAL_TRADE_PROCEDURE_AND_DOCUMENTATION

Unit 12: Export Incentives Schemes

These units are permitted manufacture of goods, including repair, re-making, re-conditioning, Notes
re-engineering and render of services. Trading units, however, are not covered under these
schemes. An EOU/EHTP/STP/BTP unit is allowed to export all kinds of goods and services
except items that are prohibited by the government.
An EOU/EHTP/STP/BTP unit is allowed to import and/or procure from DTA or bonded
warehouses in DTA/international exhibitions held in India without payment of duty all types
of goods, including capital goods, required for its activities, provided they are not prohibited
items of import. The units are also permitted to import goods including capital goods required
for the approved activity, free of cost or on loan/lease from clients. The import of capital goods
is possible on self-certification basis.
Such units can also import secondhand capital goods without any age limit, duty-free. An EOU/
EHTP/STP/BTP unit must be a positive net foreign exchange earner. Net Foreign Exchange
(NFE) earnings are calculated cumulatively in blocks of five years, starting from the
commencement of production.
The following special benefits/exemptions are extended to such units:
Reimbursement of Central Sales Tax on goods manufactured in India
Exemption from payment of Central Excise Duty on goods procured from DTA on goods
manufactured in India
Reimbursement of Central Excise Duty/additional excise duty paid on bulk tea procured
from licenced auction centres
Reimbursement of duty paid on fuels procured from domestic oil companies as per the
rate of drawback notified by the DGFT from time to time

Exemption from payment of service tax
Exemption from payment of Income Tax as per the provisions of Sections 10A and 10B of
the Income Tax Act

Exemption from industrial licensing for manufacture of items reserved for the SSI sector
An Offshore Banking Unit will extend credit on the same terms and condition as extended
to units in SEZs

Export proceeds will be realized within 12 months
Will be allowed to retain 100% of its export earning in the EEFC account
The units will not be required to furnish bank guarantee at the time of import or going for
job work in DTA, where the unit has (i) a turnover of rupees 5 crore or above, (ii) the unit
is in existence for at least three years and (iii) unit having an unblemished track record

100% FDI investment permitted through Automatic Route similar to SEZ units.
12.10 Deemed Exports

As per the foreign trade policy, deemed exports are those transactions in which the goods
supplied do not leave the country and the payment for such supplies is received either in Indian
rupees or in free foreign exchange. These are not real exports but are granted special status of
exports because of the nature of transactions involved.
The following types of supplies of goods manufactured in India are treated as deemed exports:

1. Supply of goods against Advance Licence/Advance Licence for annual requirement/DFRC
under the Duty Exemption/Remission Scheme

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