DUTY EXEMPTION & REMISSION SCHEMES FOR INDIAN EXPORTERS

You all must have heard about duty exemption and remission schemes by the government of India in different import export courses online so we will be discussing this in detail in this article so that you can understand it better. Duty free exemption and remission schemes by the Indian government mainly include three things. Advance Authorisation, Duty free import Authorisation and Duty drawback. Let us discuss each of them in detail

 

Advance Authorisation

An Advance Authorization is given to allow duty-free import of inputs that are physically incorporated into the export product (while making normal allowance for wastage). Fuel, oil, or catalysts that are consumed or used in the production of the exported product are also eligible for the incentive.

 

Eligibility:

1. A manufacturer exporter or a merchant exporter linked to a supporting manufacturer can receive an Advance Authorization. 
2. Advance Authorization for pharmaceutical products made using the non-infringing (NI) process will be issued only to the manufacturer exporter. 
3. Advance Authorisation shall be obtained for:

•  I Physical export (including export to SEZ)
•  Intermediate supply; and/or
•  Supply of stores’ on board of a foreign going vessel/aircraft, provided that the item supplied complies with certain Standard Input Output Norms.

Advance Authorisation for annual requirement is available for the items that have been notified under SION.

 

1. Exporters with a track record of successful exports (for at least the previous two fiscal years) are eligible for Advance Authorization for Annual Requirements. 
2. In terms of CIF value of imports, entitlement is limited to 300 percent of the FOB value of physical export and/or FOR value of deemed export in the previous financial year, or Rs 1 crore, whichever is greater. 

 

Eligible exporters can apply for an Advance Authorisation under this system on a self-declaration and self-ratification basis if there is no SION/valid Adhoc Norms and if SION has been notified but the exporter wants to employ additional inputs in the manufacturing process.

• Under Advance Authorisation, a minimum value addition of 15% must be achieved. 
• Appendix 4D lists export products with a potential value addition of less than 15%. 
• The Gems and Jewellery Sector’s minimum value addition is specified in paragraph 4.61 of the Handbook of Procedures. 
• For tea, a minimum value increase of 50% is required.

 

Duty free import Authorisation 

The purpose of a Duty Free Import Authorization is to allow duty-free importation of inputs. Furthermore, imports of oil and catalyst that are consumed or used in the production of export products may be permitted. 

Eligibility

1. For products for which Standard Input Output Norms have been notified, a Duty Free Import Authorization will be provided post-export. 
2. On the export document (shipping bill/bill of export/tax invoice for export stipulated under the GST regulations), the merchant exporter must provide the name and address of the supporting manufacturer of the goods. 
3. Before exporting under a Duty Free Import Authorisation, an application must be filed with the relevant Regional Authority.
4. There is a necessity of a minimum of 20% value addition for this scheme

 

Duty drawback

Duty drawback is a special rebate on exported goods or materials under Section 75 of the Indian Customs Act. Only products utilised in the processing of commodities manufactured in India and then exported to other countries are eligible for duty drawback rates or concessions. 

It does not apply to inputs obtained without paying customs or excise duties. Re-exports of products must be completed within two years after the date of duty payment when they were imported. The Directorate of Drawback, Department of Revenue, Ministry of Finance, and Government of India set all industry drawback rates, which are amended on a regular basis – usually on June 1 each year.