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Exports are given priority in India and enjoy lot of incentives. However, the major
problem lies in the process of realizing them. Unfortunately, exporters have to
approach multiple organizations for seeking sanction. Each organization prescribes
its own exclusive method of documentation as well as procedure form the stage of
submission of claim till sanction. The documentation and procedures are diverse
with each incentive provided. This is not the end of their problems. Incentives are
available at post-shipment stage but they are connected with the documents
generated at the time of shipment. If exporter does not pay adequate care and
attention at the time and stage of export shipment in providing complete and
adequate information in the documents in a proper way, their claims for export
incentives are adversely affected. It is essential to the exporters to plan carefully in
respect of incentives, even at the time of shipment, though their benefits are
available only after completion of the shipment.
In the absence of adequate planning, it will upset their fund flow and equally the
total realization may not be remunerative for effecting exports. Exporters have to
draw a suitable plan of action for claiming incentives in a timely manner to avoid
delays and cuts in realization. Exporters have to understand the different procedural
formalities, connected with multiple and diverse agencies. This would ensure proper
compliance for availing of full benefit of incentives. In this area, Government has to
rationalize the incentives by opening a single window approach for sanction of
multiple claims.
TYPES OF INCENTIVES
Government of India has been endeavoring to develop exports through various
financial and non-financial assistance and fiscal incentives to the exporters. They
are divided in two categories. They are:
1. Incentive Linked to Export performance
(a) Duty Drawback(DBK)
(b) Excise Duty Refund/Exemption
(c) Duty Free Replenishment Certificate
(d) Duty Entitlement Pass Book Scheme.
2. Duty Exemption Scheme
Advance License
3. Fiscal Incentives
drawback is less than 80% of the duties paid, the exporter can submit an
application for suitable upward revision. This is known as Special Brand Rate. The
application is to be submitted to Directorate of Duty Drawback Ministry of Finance.
When Duty Drawback not Admissible: Duty drawback is admissible for the export of
all the notified products. However, in the following cases, it is not admissible:
(a) No excise/customs duty is paid for the manufacture of export product
(b) Amount of drawback is less than 1% of the FOB value of the goods. However, if
the amount of drawback is more than Rs.500, it can be claimed
(c) If the export proceeds are not realized within six months
(d) If the amount of foreign exchange spent on the inputs used for the export is
more than the foreign exchange value of the exports. In other words, value addition
is negative
(e) Cenvat Credit is availed of
How to File Claim: The procedure for claiming duty drawback depends upon whether
the processing of shipping documents has been computerized or not. The exporter
is not required to file any separate application for claiming duty drawback, if the
processing of documents has been computerized at the jurisdiction customs station.
Where processing has not been computerized, separate application is to be
submitted for claiming duty drawback. Triplicate copy of the shipping bill becomes
the application only after the Export General Manifest is filed.