Export Incentives and Documentation Quiz

The objective of the EPCG Scheme is to facilitate import of capital goods for producing quality goods and services and enhancing India’s manufacturing competitiveness. The EPCG Scheme allows import of capital goods for pre-production, production, and postproduction at 0% customs duty, thereby reducing the cost of importing capital goods.

The Duty Drawback Scheme allows exporters to get a refund on customs duty paid on imported goods that are to be treated, processed, or incorporated in other goods for export. It also involves the refund of central excise duty paid on indigenous materials used in the manufacture of the finished goods. These refunds are referred to as 'drawback'.

Finished goods, when exported, can be exempted from payment of excise duty through export under rebate or export under bond. In the case of export under rebate, the exporter initially pays the duty and then claims a refund at a later stage. Export under bond allows goods to be exported without prior payment of duty, but an indemnity bond is executed in favor of excise authorities.

Export goods are exempted from the payment of sales tax. Necessary documents must be provided to the sales tax authorities, giving proof of export, in order to claim sales tax exemption.

The EPCG Scheme and the Duty Drawback Scheme play a crucial role in promoting India's export competitiveness by reducing the cost of importing capital goods and providing refunds on customs and excise duties, thereby enhancing the overall competitiveness of Indian exports.