Export Promotion Schemes and Incentives

Chapter 3 of FTP Dr M.S Krishna Kumar, B.Com, ML, PhD (law)

Duty Exemption/Remission Scheme Duty Exemption/Remission Scheme Duty Exemption Scheme Advance Authorization (AA) + Duty Free Import Authorization (DFIA) Duty Remission Scheme Duty Drawback Scheme (DBK) MoF/DoR Rebate On State & Central Taxes & Levies (ROSCTL)- Ministry of Textiles Remission of Duties & Taxes on Exported Products ( RoDTEP) DoR

Export Promotion Scheme Duty Entitlement Pass Book Scheme _ DEPB implemented in 1997 pre export post export import duty neutralization & financial benefits pre export abolished in 2000- post export in 2011 Focus Product Scheme- FPS launched in 2006 export of notified products to all countries 2% to 5% scrip later in 2015-20 FTP merged with MEIS Focus Market Scheme launched 2006- FMS- encourage exports to selective markets (a) traditional markets (UK, USA, Canada) (b) emerging markets (c) other markets merged with MEIS Either one FPS or FMS can be claimed MEIS (merchandize export from India Scheme & SEIS (service export from India Scheme) RoSCTL Rebate of State & Central Taxes & Levies on export of garments/made-ups issued in customs portal RoDTEP Remission of Duties & Taxes on Exported products issued in customs portal

Export Promotion Scheme- Scrips- EOU/SEZ Export promotion Scheme- duty remission scheme AA/DFIA/EPCG Duty Drawback Scheme Incentive for exports neutralize import duty content DEPB/FMS/FPS/MEIS/SEIS/RoSCTL/RoDTEP scrip based fiscal benefits transferable used for payment of permitted duties EOU (STP/EHTP) Scheme Tax Benefits (BCD/IGST) on condition 100% of products exported subject to permissible DTA sale SEZ infrastructure generation of employment all duties on products/services exempted

Export Promotion Scheme Professional Opportunities Export incentive consultancy business process study & advise on correct export promotion scheme Feasibility of scheme for exports/domestic supplies advising maximum benefits DGFT application, documentation, representation, coordination Redemption & invalidation of licencce Export Obligation Discharge Certificate (EODC) Setting up EOU - Debonding of EOU SEZ setting up SEZ advisory Litigation under FTDR Act 1992 DGFT Adjudication Appeal - non fulfilment of export obligations delay - Customs Act, 1962 recovery of duties penalties - adjudication appeal FTP applicability, eligibility conditions, duties exempted, Value addition, validity, transferability HBOP Procedure Fixation of norms, time limit, clubbing of authorization, port of registration, extension of EO period, redemption etc www.dgft.gov.in Regulatory updates FTP - HBOP

Export from India Scheme Export from India Scheme Objectives To provide rewards to exporters to offset infrastructural inefficiencies & associates costs Merchandize Exports from India Scheme (MEIS) and Service Exports from India Scheme (SEIS) Duty Credit Scrips granted as rewards under MEIS and SEIS.- scrips freely transferable Credit Scrips can be used for -Payment of Basic Customs Duty and Additional Customs Duty specified for import of inputs or goods, including capital goods, as per DoR Notification, except items listed in Appendix 3A. Payment of Central excise duties on domestic procurement of inputs or goods

MEIS/SEIS Scrips Advance License also known as DEEC (Duty Entitlement Exemption Certificate) earlier exempted BCD,CVD, SAD, ADD & Safeguard duty under GST regime only BCD IGST payable and importer can avail ITC MEIS/SEIS Scrip earlier can be used for payment of BCD/CVD/SAD now cannot be used for payment of IGST MEIS/SEIS scrip liable to VAT prior to 1.7.2017 scrips under GST regime fall under heading 4907 attracting 12% GST from 22.9.2017 rate is 5%

Export Incentive Scheme- FTP 2023 Remission of Duties & Taxes on Exporter Products ( RoDTEP) & Remission of State & Central Taxes & Levies (ROSCTL) object to remit taxes paid on notified goods exported Shift from incentive to remission Procurement of duty free input/raw material from abroad/domestic ensured through AA/DFIA scheme- technological upgradation EPCG import/domestic procurements

Rebate of State & Central Taxes & Levies (RoSCTL) Rebate - all embedded State and Central Taxes and Levies on garments and made-ups to enhance competitiveness of these sectors- granted by way of rebate in addition to drawback Scheme is available for apparel/garments (under Chapter 61 and 62) and Made-ups (under Chapter 63) in exclusion of RoDTEP The Scheme came into effect from 07.03.2019. shall remain in force up to 31st of March 2024 RoSCTL scheme has been notified by the Ministry of Textiles- the scheme shall be implemented by the Department of Revenue. given to the exporter in the form of duty credit scrips which will be maintained in the electronic duty credit ledger. The scrips shall be issued electronically on Customs automated system. Notified in Schedule to Notfn 14/26/2016- IT (Vol.II) dated 08.03.2019.- Ministry of Textiles

RoSCTL Men s Cotton Suits 61030101 Rs.3.60 per piece - Value cap Rs.105.70 Cotton T shirts 610901 - Rs.2.90 per piece Value cap Rs.13.80 Scrip cannot be used for the payment of IGST only for basic customs duty In Eligible Export categories Goods which are restricted or prohibited for export under Schedule-2 of Export Policy in ITC-HS Exports through trans-shipment - exports that are originating in third country but trans-shipped through India Goods subject to minimum export price or export duty Deemed exports under Foreign Trade Policy

RoSCTL Ineligible categories Goods manufactured or exported by any of the units situated in SEZ/FTWZ/EPZ goods exported by 100% EOU Goods manufactured in EOU/SEZ and exported through DTA unit Goods manufactured partly or wholly in a warehouse under section 65 of the Customs Act, 1962 RoDTEP & RoSCTL scheme cannot be claimed simultaneously scrips transferable to any other person having a valid IEC and valid ICEGATE Registration entire amount to be transferred not part amount e-scrip e valid for a period of one year from the date of its creation in the ledger - Revalidation of the Scrip shall not be permitted

RoSCTL- How to Claim To claim benefit exporter to make a claim for RoSCTL in the EDI shipping bill- by using specific codes The options for RoSCTL scheme are being provided with separate scheme-code as listed below: Scheme Code Scheme Description 60 Drawback and RoSCTL 61 EPCG, Drawback and RoSCTL Post filing of Gateway EGM in respect of the processed shipping bills, the RoSCTL Scrolls can be generated by the customs location in ICES as done for drawback/IGST scroll. Once the RoSCTL scroll is generated, the duty credit amount allowed will be available within the RoSCTL Credit Ledger Account created for the IEC exporter to login and convert it into duty credit scrip Transfer of duty credit in e-scrip shall be allowed within the customs automated system from the ledger of a person to the ledger of another person who is a holder of an Importer-exporter Code

RoSCTL- Statutory Provisions Sec.51B Ledger for duty credit inserted w.e.f 27thMarch 2020 Issue of duty credit scrip in remission of duty/tax on goods exported Sec.51 B(2) person who is recipient of scrip shall maintain electronic credit ledger in Customs Automated system Sec. 51 B (3) may be used for payment of customs duties to the person to whom issued or to the transferee Sec. 157 (ja) manner of maintaining electronic duty credit ledger, making payment, transfer of duty credit from one person to another (S.157- General power to make Regulations) Electronic Duty credit Regulations 2021 came into effect from 23.09.2021 Claim, duty credit, scroll, e-script, creation, registration, use of scrip, validity defined

Status Holder Status Holder Business leaders who excelled in international trade successfully contributed to country s foreign trade Provide guidance and handholding to new entrepreneurs All IEC holders eligible status recognition depend on export performance during current and previous three years export performance is necessary in at least two out of four years. export performance will be counted on the basis of FOB of export earning in freely convertible foreign currencies For deemed export, FOR value of exports in Indian Rupees shall be converted in US$ at the exchange rate notified

Status Holder Contd Status Category Export Performance FOB / FOR (as converted) Value (in US $ million) One Star Export House 3 million US$ Two Star Export House 25 million US$ Three Star Export House 100 million US$ Four Star Export House 500 million US$ Five Star Export House 2000 million US$

Status Holder Privileges Authorisation & Customs Clearances for imports/exports may be granted on self-declaration basis; Input-Output norms may be fixed on priority within 60 days by the Norms Committee Special scheme in respect of Input Output Norms to be notified by DGFT from time to time, for specified status holder Exemption from furnishing of Bank Guarantee for Schemes under FTP, unless specified otherwise anywhere in FTP or HBP; Exemption from compulsory negotiation of documents through banks. Remittance / receipt - however, would be received through banking channels;

Status Holder Privileges Two star and above Export houses shall be permitted to establish Export Warehouses as per Department of Revenue guidelines. Three Star and above Export House shall be entitled to get benefit of Accredited Clients Programme (ACP) as per the guidelines of CBEC Preferential treatment and priority in handling of their consignments by the concerned agencies

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