'Export Assistance and Incentives\r'

' merchandiseation in centimeimeives Devices utilise by countries to encourage swops. These piece of ass allow in tax fillips for craftsmanshipers, allowing them exemptions from the normal plannings of anti-monopoly legislation, discriminatory access to capital securities painss, priority maturation countries have started manufacturing industries plainly recently. As a will, their cost of toil full generally tends to be high because of the following reasons: ? Total craftsmanship placeplace availability within the earth is depressed with the result that the economies of large-scale doing evoke non be reaped. Productivity of labor is low because the charter of mechanization as comp bed to that in the highly- waxed countries is low. ?Manufacturing social social units in ontogenesis countries, organism base and mod, have considerably less expertise in the field of contradictory merchandise and because the volume of merchandiseingingations is l ow, the per unit cost of trading onward motion expenditure tends to be high. India has to examine high resources for suppuration which has to be through with(p) through a bod of validatory levies which tend to push up the boilers suit cost of production.Most developing countries have, in that locationfore, resorted to a number of export promotional stuff measures. India has to a fault been providing export attention to Indian exporters. However, the WTO Agreement on Subsidies and countervailing duties does non allow particularized types of export subsidies. The administration of India is, therefore, removing those export incentives which argon not WTO compatible. NEW SYSTEM OF export aid: From 1992, export incentive system in India has been do simple. There ar essentially common chord major incentives.These be: (1) Market- found mass meeting browse; (2) Fiscal Concessions, and (3) Facilities to a lower place the mass-Import Policy. These ar discussed in detail below: grocery store BASED EXCHANGE RATE: For long, impertinent harbor of the rupee was managed by the leave bank of India (RBI) by pegging the protect of the rupee to a basket of currencies. RBI apply to keep the apprise of the rupee at a level which was higher than the tangible comfort. In the post-Economic Reforms period, the government of India decided to get rid of all direct incentives to exports and promote exports through the supersede rate machine.Accordingly, the Liberalized Exchange Rate Management System (LERMS) was introduced. Under this system, there were 2 exchange rates: virtuoso authoritative rate which was pertinacious by the RBI as was the practice in the beginning; and second, a rate which was quoted by the banks base on the demand-supply position. exportingers had to surrender 40 per cent of their foreign exchange earnings to banks and could portion come out the residual 60 percentage at the trade rate which was normally anticip ate to be more than than attractive than the official rate.Through this mechanism the Government hoped to achieve two objectives: First the difference between the market rate and the official rate would earmark enough incentives to the exporters. Second, this would introduce a self-balancing mechanism for the balance of take, because only that much merchandises could be made which could be financed through the market i. e. the resources ready(prenominal) through the 60 percent account. One year’s set out revealed that rupee remained stable in the foreign market. This gave to the Government for full convertibility on the trade account.Accordingly, rupee was made fully convertible security for export-import transactions in meet 1993. This would suffer more financial benefit to the exporters as beneath the LERMS, they had to surrender 40 per cent of their receivables at a discount which averaged more or less 15 per cent when LERMS was in routine. Since March 1993, the exchange rate of the rupees is fully determined by the demand supply conditions in the market. Under much(prenominal) a system, exporters leave get benefit when rupee depreciates plot of land importers go out lose. When rupee appreciates, the balance of benefits will be just the reverse. TAX CONCESSIONS: a)In the computation of total income, Section 80-HHC allows a implication of the whole of the profit derived from the export of goods or merchandise. The requirement of minimum tax contained in Section 115-J does not apply to merchandise corporate assesses. This benefit is also uncommitted to supporting manufacturing businesss exporting through trade/ Trading Houses come throughd that the amount of deduction claimed is retain as a reserve for the objective of the business of the assesse. However, the budget for the year 2000-2001 has trim down this exemption by 20 per cent every year to be phased out in five years. b)Exemption from tax revenue of the remuneration from overseas projects to the extent of 50 per cent. (c)Exemption from taxation of 50 per cent of royalty, commission, fees or every similar honorarium commenceed from the exports of skilful know-how and technical services. (d)A 10-year tax holiday for 100 per cent export-oriented units and for units located in b atomic number 18(a) deal out/Export Processing Zones. (e)Discounted rates of usance business on imports of selected items of machinery for export production. ? EXPORT c atomic number 18 AND INCENTIVES AVAILABLE TO THE EXPORTSExport economic aid and a variety of facilities and export incentives available to the Exporters are apt(p) in mindset and more aggressive approach is needed to develop engineering. Export capabilities and to prove such exports. These whitethorn include disclose Management of trade policies at international level, simplified procedures, better Incentives for high value-technology incentives exports etc. Export incentives can play an int egral role in developing export capability and can encourage exports by providing financial assist to exporting companies to enable them to compete efficaciously in international markets.For conspiracy African industries facing exchange rate fluctuations and eternal threats of competitors in other developing markets, tools to enhance global access to key markets are imperative. In addition to benefits available downstairs the African Growth and Opportunities Act (AGOA) (legislation passed in the United provinces of America), bilateral trade agreements such as the one between southwesterly Africa and the European Union, the General System of Preferences (GSPs), the surgical incision of calling and Industry (DTI) and the International Trade Administration Commission (ITAC) provide attention ranging from marketing support to export ascribes. The elementary export incentives currently in operation in southeast Africa include: ? Export marketing and investment avail desi gn (EMIA) ? Tariff Restructuring Program, ? orbit Assistance system (SSAS), ?Rebate Provisions ?Export reliance and Foreign Investment Reinsurance Scheme (ECRS), ? art source Certificate Scheme (DCCS), ? drive Industry exploitation Program (MIDP), ?Sector Partnership Fund, ?Export Credit Incentives and Export pay. EXPORT MARKETING AND INVESTMENT aid end (EMIA)The purpose of the EMIA schema is to partially compensate exporters for certain costs incurred in appreciate of activities aimed at developing export markets for South African products and to recruit new foreign direct investment into South Africa. Additional benefits are awarded to diminutive, medium and micro-sized enterprises (SMMEs) and businesses owned by the previously disadvantaged. The financial assistance is in the form of reimbursement and is not a pre- compensable benefit.TARIFF RESTRUCTURING PROGRAM: By virtue of South Africa’s World Trade formation (WTO) membership, import obligation levels are also being reduced and the import tariff listings are being simplified by reducing the number of tariff headings. Export incentives relate only to the export of goods indentured for recognized export markets, which in general nub to countries outside the Southern African Customs Union (SACU). SECTOR assistance SCHEME (SSAS)Financial assistance is available to industry sectors with the objectives of developing new export markets; turnout the export base; stimulating the amour of SMMEs in the export sector, promoting black economic empowerment (BEE) and women empowerment within the boilers suit objective of job creation. REBATE provide: Is aimed at the promotion of manufacturing and exportation of goods, and are available to certain manufacturing industries in remark of duties applicable to imported goods, raw substantives and components employ in manufacturing, processing and for export.EXPORT source AND distant INVESTMENT REINSURANCE SCHEME (ECRS) Provides exporters wit h insurance spinning top against political and transfer risks, as well up as commercial and insolvency risks. A supernumerary dispensation exists for SMMEs. DUTY CREDIT CERTIFICATE SCHEME (DCCS) This synopsis is designed as a temporary â€Å"kick-start” measure to enhance the export competitiveness of certain prescribed cloth and clothing products by offering affair credit certificates to qualifying exporters. These work credit certificates could be used to off-set tradition duties account payable on import of similar products.MOTOR patience DEVELOPMENT PROGRAM (MIDP) Is available to drive vehicle assemblers and component manufacturers and exporters. The programme enables local anaesthetic vehicle and component manufacturers to increase production runs and encourages rationalization of the number of models manufactured by way of exports and complementing import of vehicles and components. EXPORT CREDIT INCENTIVE Financing at reduced rates by the Investment Devel opment Corporation (IDC). An export credit incentive is available to selected expansion organisations expected to result in increased foreign exchange earnings.Financing of credit for exporters of capital goods is also available through the IDC or private-sector merchant banks at reduced rates. ? Credit facilities chthonian the export finance scheme for capital projects: Credit facilities are available to exporters of capital projects nether the Export Finance Scheme for outstanding Projects to allow them to compete internationally by offering buyers competitive rates denominated in US Dollars. FACILITIES AND INCENTIVES TO INDIAN EXPORTERS progress of export has been a major thrust scene of action of the Ministry of commercialism And Industry for the last three decades.Apart from this. M either other Central/ country Ministries have also been involved in the promotion of India’s exports. Many Exports promotional material Councils, Public Sector Undertakings, Chambers o f Commerce, Industries’ Associations and work Organizations are also contributing towards the promotion of Indian exports. The facilities and incentives presently available to the Indian exporters include the Following. MARKETING DEVELOPMENT ASSISTANCE (MDA) The Ministry of Commerce and Industry has a scheme of MDA, which was launched in 1963 with a run across to energize and diversify the export trade, along with he development of marketing of Indian products and commodities abroad. The MDA is utilize for: Market research, commodity research, area great deal and research; Participation in trade fairs and exhibitions; Export publicity and dissemination of development; Trade delegation and study teams; make-up of offices and branches in abroad; Grant-in-aid to Export Promotion Councils and other approve organizations for the development of exports and the promotion of foreign trade; and any other scheme which is generally aimed at promoting the development of markets f or Indian products and commodities abroad.MARKET ACCESS INITIATIVE (MAI) The Ministry of Commerce and Industry has introduced the MAI in April 2001 with the idea that the Government shall assist the industry in R&D, market research, specific market and product studies, warehousing and retail marketing infrastructure in select countries and direct market promotion activities through media advertizing and buyer-seller meets. Financial assistance shall be available under the scheme to EPCs, industry and trade associations and other eligible activities, as whitethorn be notified from time to time. A small allocation of Rs 42 corer has been made for 2002-03. ? important ASSISTANCE TO STATES The State Governments shall be boost to fully participate in boost exports from their respective States. For this purpose, a new scheme â€Å"Assistance to States for Infrastructural Development for Exports” (ASIDE) has been initiated which would provide currency to the States found on the twin criteria or gross exports and the rate of growth of exports from diverse States. Eighty per cent of the total notes would be allotted to the States based on the above criteria and remaining 20 per cent will brutalized by the Centre for unhomogeneous infrastructure activities that cut across State boundaries, etc.A sum of Rs 49. 5 crore has already been pass for 2001-02 and furthers a sum of Rs 330 crore has also been approved for 2002-03. The State shall utilize this amount for developing complementary and critical infrastructure. TOWNS OF EXPORT rectitude A number of towns in specific geographical locations have emerged as slashing industrial locations and handsomely contributing to India’s exports. These industrial cluster-towns have been recognized with a view to maximizing their export profiles and tending in upgrading them to move up the higher value markets.A beginning is being made to consider industrial cluster towns such as Tripura for Hosiery, Panipa t for wool Blankets and Ludhiana for Woolen knitwear. Common service providers in these areas shall be entitled for EPCG Scheme, coin under the MAI scheme for creating focused technological services, priority assistance for identified critical infrastructural gaps from the Scheme on Central Assistance to States. Units in these notified areas would be eligible for availing all the Exim Policy Scheme. The Government of India has framed several schemes to promote exports and to admit foreign exchange.These schemes grants incentive and other benefits. The hardly a(prenominal) important export incentives, from the point of view of indirect taxes are briefed below: ? palliate TRADE ZONES (FTZ) Several FTZs have been realized at various places in India a standardized(p) Kandla, Noida, Cochin, etc. No fray duties are payable on goods manufactured in these zones provided they are made for export purpose. Goods being brought in these zones from different parts of the country are broug ht without the payment of any come to transaction. Moreover, no customs duties are payable on imported raw material and components used in the manufacture of such goods being exported.If entire production is not sold outside the country, the unit has the provision of selling 25% of their production in India. On such sale, the scrub avocation is payable at 50% of prefatory summation additional customs or normal excise duty payable if the goods were produced elsewhere in India, whichever is higher. ELECTRONIC figurer hardware technology PARK / SOFTWARE TECH nary(prenominal)OGY PARKS This scheme is just like FTZ scheme, but it is restricted to units in the electronics and computer hardware and software sector. ADVANCE certify / DUTY EXEMPTION ENTITLEMENT SCHEME (DEEC)In this scheme advance licence, either quantity based (Qbal) or value based (Vabal), is given to an exporter against which the raw materials and other components may be imported without payment of customs duty pro vided the manufactured goods are exported. These licence are transferable in the open market at a price. EXPORT promotional material CAPITAL GOODS SCHEME (EPCG) According to this scheme, a domestic manufacturer can import machinery and plant without paying customs duty or settling at a concessional rate of customs duty.But his undertakings should be as mentioned below: Customs Duty RateExport ObligationTimetime 10%4 quantify exports (on FOB basis) of CIF value of machinery5 years Nil in shimmy CIF value is Rs200mn or more. 6 times exports (on FOB basis) of CIF value of machinery or 5 times exports on (NFE) basis of CIF value of machinery. 8 years Nil in display case CIF value is Rs50mn or more for agriculture, aquaculture, animal husbandry, floriculture, horticulture, poultry and sericulture. 6 times exports (on FOB basis) of CIF value of machinery or 5 times exports on (NFE) basis of CIF value of machinery. years . Note:- NFE stands for net foreign earnings. CIF stands for cos t plus insurance plus freight cost of the machinery. FOB stands for Free on Board i. e. export value excluding cost of freight and insurance. DEEMED EXPORTS The Indian suppliers are entitled for the following benefits in respect of deemed exports: ? Refund of excise duty compensable on final products ?Duty drawback ?Imports under DEEC scheme ?Special import licenses based on value of deemed exports The following categories are treated as deemed exports for seller if the goods are manufactured in India: 1. tack on of goods against duty exhaust licences under DEEC scheme 2. Supply of goods to a 100 % EOU or a unit in a free trade zone or a unit in a software technology park or a unit in a hardware technology park 3. Supply of goods to holders of licence under the EPCG scheme 4. Supply of goods to projects financed by two-lobed or bilateral agencies or funds notified by the Finance Ministry under international competitive bidding or under limited tender systems in symmetry with th e procedures of those agencies or funds where legal agreements provide for ender evaluation without including customs duty 5. Supply of capital goods and spares upto 10% of the FOR value to plant food plants under international competitive bidding 6. Supply of goods to any project or purpose in respect of which the Ministry of Finance permits by notification the import of goods at zero customs duty along with benefits of deemed exports to domestic supplies 7. Supply of goods to power, oil and blow sectors in respect of which the Ministry of Finance permits by notification benefits of deemed exports to domestic supplies MANUFACTURE infra BONDThis scheme furnishes a bond with the manufacturer of adequate amount to undertake the export of his production. Against this the manufacturer is allowed to import goods without paying any customs duty, even if he obtain it from the domestic market without excise duty. The production is made under the supervision of customs or excise authority . DUTY DRAWBACK IT means the rebate of duty chargeable on imported material or excisable material used in the manufacturing of goods in and is exported.The exporter may claim drawback or refund of excise and customs duties being paid by his suppliers. The final exporter can claim the drawback on material used for the manufacture of export products. In case of re-import of goods the drawback can be claimed. The following are Drawbacks: ?Customs paid on imported inputs plus excise duty paid on autochthonal imports. ?Duty paid on boxing material. Drawback is not allowed on inputs obtained without payment of customs or excise duty.In part payment of customs and excise duty, rebate or refund can be claimed only on the paid part. In case of re-export of goods, it should be done within 2 years from the date of payment of duty when they were imported. 98% of the duty is allowable as drawback, only after inspection. If the goods imported are used before its re-export, the drawback will be a llowed as at reduced per cent. ? denote Yash patel COLLEGE NAME Kamala Mehta College of commerce ROLL NO. 156 PROJECT NAME Export assistance and incentives CLASS T. Y. BCOM (B) ?\r\n'