Export Incentives for exporter of India

 Merchandise Exports from India Scheme (MEIS Scheme)-

i. Under the MEIS Scheme, an incentive of 2% to 5% of the FOB value of the

exports is provided to all exporters (merchant as well as manufacturer exporter),
irrespective of their annual turnover.

ii. There is no restriction of Country, i.e. eligible products exported to any country
in the world can avail the MEIS Scheme.

iii. Application for MEIS scheme is to be filed electronically to the jurisdictional

DGFT office.

iv. MEIS incentives are not given in the form of cash or Bank transfer. It is given
in the form of duty credit scrips also known as MEIS licenses. These licenses
can be used for payment of Import duties or can be sold in the open market
at a discounted rate.

 Rebate of Duties & Taxes on Export Products (RoDTEP

Scheme)-

i. The new RoDTEP Scheme will replace the old MEIS Scheme in a phased manner.

ii. The scheme ensures that the exporters receive the refunds on the embedded
taxes and duties previously non-recoverable.
 iii. The notified rates under the RoDTEP scheme for several sectors include the rates
at 0.5%, 1.4%, 2.4% and 4%. However, the government is yet to notify a fixed
quantum of rebate per unit for certain export items.

iv. The List of eligible products & the rate of benefit under the new RoDTEP
Scheme is still not finalized.

v. Re-exported products are not eligible under this scheme.

vi. The RoDTEP scheme aims to refund all those hidden taxes and levies, which
were earlier not refunded under any export incentive scheme, For example:
1. Central & state taxes on the fuel (Petrol, Diesel, CNG, PNG,
and coal cess, etc) used for transportation of export products.
2. The duty levied by the state on electricity used for
manufacturing.
3. Mandi tax levied by APMCs.
4. Toll tax & stamp duty on the import-export documentation
etc.

 Service Export from India Scheme (SEIS Scheme)-

i. Under the SEIS Scheme, an incentive of 3% to 7% of Net foreign exchange

earnings is provided to services exporters of notified services in India.

ii. Similar to the MEIS scheme, rewards under the SEIS Scheme are given in the
form of freely transferable duty credit scrips.

iii. It requires the service providers to have an active Import-Export Code (IEC
Code) with minimum net foreign exchange earnings of 15,000 USD to be
eligible to claim under the scheme.

iv. An application under the SEIS scheme is to be filed electronically to the

jurisdictional DGFT office.

 Advance Authorization Scheme (AAS)-

i. It was introduced to allow duty-free import of raw materials required for the
production of export goods.

ii. It means that one can import raw materials at 0% Import duty if those raw
materials are going to be used in the manufacture of the export products.
 iii. Advance License comes with an obligation to maintain a minimum of 15%
value addition and to export the goods within 18 months from the License
issue date.

iv. The materials imported under the Advance Authorisation Scheme comes
with “Actual User condition”. i.e. It cannot be transferred or sold to any other
entity.

 Duty-free Import Authorization (DFIA Scheme)-

i. The purpose of this scheme is the same as the Advance License scheme i.e. to
allow duty-free import of raw materials.

ii. The AA, DFIA Scheme is a post-export scheme. It means that duty-free
import is allowed only after the export is made.

iii. DFIA scheme is applicable to only those products which are covered under the
Standard Input-Output Norms (SION).

 Duty Drawback Scheme (DBK Scheme)-

i. It is a refund of the duties given by the Govt. This scheme is implemented &
monitored by the Department of Revenue [Customs Department].

ii. In the DBK scheme, duties of customs & central excise that are chargeable on
imported and indigenous materials used in the manufacture of exported goods
are refunded back.

iii. Duty Drawback is directly credited into the Bank account of the exporter within
2 months from the shipment date.
 iv. If anyone availing the benefit of a GST refund, then you must opt for a lower
rate of the Duty Drawback.

 Scheme for Rebate on State and Central Taxes and Levies

(RoSCTL Scheme)-

i. The old RoSL scheme was replaced by the new RoSCTL Scheme from
07.03.2019.
ii. It is implemented by the Directorate General of Foreign Trade (DGFT) and
rewards are given in the form of MEIS like duty credit scrips.
iii. The RoSCTL scheme will be soon merged with the new RoDTEP Scheme for all
sectors.

 Export Promotion Capital Goods Scheme (EPCG Scheme)-

i. EPCG Scheme, Manufacturer exporter or a merchant exporter tied with a

supporting manufacturer can import capital goods/machinery required for
pre-production, production & post-production of export goods at 0% duty.

ii. Various service exporters can take the benefit of the EPCG scheme to reduce
capital costs. Service Exporters like Hotels, Travel & Tour Operators, Taxi
Operators, Logistics Companies, Construction Companies can utilize the EPCG
Scheme by importing capital goods/equipment at 0% duty.

iii. EPCG scheme comes with an export obligation. The obligation is to export
goods/services worth 6 times the duty saved value in a period of 6 years from
the License issue date.

 EOU/EHTP/STP/BTP Schemes
 i. The EOU scheme aims to provide a favorable ecosystem to the companies
indulging in 100% exports by giving them certain waivers and concessions
in compliance and taxation matters, thereby making it easier for them to
conduct business.
ii. If any company is a 100% exporting company, then you have an option to
register yourself under the EOU Scheme [Export-oriented Units]
iii. the EOU scheme became less prominent due to the removal of tax
benefits given to it under the Income Tax Act.

 GST Refund for Exporters / LUT Bond facility / 0.1% GST benefit
for Merchant Exporters-

They can make an export supply either “on payment of GST” or “without paying
any GST” under the LUT bond facility.
a) LUT Bond Facility – Exporters can export goods without paying any
GST by obtaining a letter of undertaking/bond.
b) IGST Refund – Exporters can export goods “on payment of GST”
and claim the refund of the same from the Customs
Department.
c) 1% GST benefit for Merchant Exporters. – Merchant
exporters/traders can obtain goods meant for export from the
domestic supplier at a 0.1% concessional GST rate

 Transport and Marketing Assistance Scheme (TMA Scheme)-

i. This scheme is introduced only for the agricultural export products.

ii. The TMA scheme is eligible for all the export products covered under
chapters 1 to 24 of the ITC HS Code, including marine and plantation
products. However, some specific products falling under Chapter 1 to 24
would not be covered under the Scheme for assistance.

 Deemed Export Benefits-

i. The Objective of these benefits is to provide a level-playing field to the

domestic manufacturers in certain specified situations, as may be decided
by the Government from time to time.
 Star Export House / Status Holder Certificate

i. This is not a financial incentive scheme, but a kind of recognition/certification

given by the Govt. of India to eligible exporters.

ii. Exporters are given the status of one star export house, two star export
house, three star export house, four star export house & five star export
house on achieving certain export turnover/performance.

iii. For Example, to get one star export house status, export turnover to be
achieved in current plus previous three financial years (total four years
collectively) is USD 3 million. Image given provide the status category &
export performance which needs to be maintained in last three and current
financial year. (above diagram).

 Market Access Initiative (MAI Scheme)-

i. The scope of the scheme is to provide financial support to eligible agencies

for undertaking market access initiatives like direct/indirect marketing,
market research, promotion & branding in new markets, and taking care of
statutory compliance costs in the importing country.

ii. The eligible agencies include all the Export Promotion Councils, Commodity
boards, registered trade promotion organizations, recognized associations,
individual exporters.
 Market Development Assistance (MDA) Scheme-

This is an old scheme that was merged into the new Market Access Initiative (MAI
Scheme).

 Towns of Export Excellence (TEE)-

i. Towns exporting goods worth more than Rs. 750 Cr. And having high export
potential are notified as Towns of export excellence (TEE).

ii. Financial assistance is provided to recognized associations in those towns as

per the guidelines covered under the Market Access Initiative (MAI Scheme)

 Interest Equalization scheme (IES)-

The Scheme provides 5% Interest support to all manufacturers in the MSME

Sector and 3% support to all exporters.

 NIRVIK Scheme-

i. has introduced the NIRVIK Scheme which provides higher insurance

cover, reduced premium for small exporters, and a simplified claim
settlement process.

ii. It is primarily an insurance cover guarantee scheme that provides a

cover of up to 90% of principal and interest as against the current credit
guarantee of only up to 60% loss. The cover will include both the pre
and post-shipment export credit.

iii. This scheme will ensure that the foreign and rupee credit interest rates
will stay below 4% & 8% respectively.