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Exporters — Tax, GST & FEMA

Export Promotion Schemes Overview

Export Schemes Hub

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Overview

Export promotion schemes are the incentives the government offers to make Indian exports competitive — the Advance Authorisation of Chapter 4 of the Foreign Trade Policy, the EPCG scheme for capital goods, duty drawback under Section 75 of the Customs Act 1962, and the duty remission schemes that return the taxes embedded in exported products. This is the gateway page for the firm's export incentives practice: whatever the exporter's product and market, the schemes are the difference between pricing competitively and leaving money unclaimed.

The schemes work on different parts of the export cost. Advance Authorisation removes the duty on imported inputs; EPCG removes the duty on capital goods in exchange for an export obligation; drawback returns the duty on inputs through the shipping bill; and the remission schemes return the embedded taxes. Used together, they can remove a substantial layer of cost from the export — but only when each claim is documented, tracked and reconciled.

The failure modes are the same across the schemes: benefits unclaimed because the exporter did not know, claims made without the records, export obligations missed with the reversal consequences, and the scheme positions not reconciled with the input tax credit claims. Each is a cost the competitor who uses the schemes does not carry.

This service is for exporters who want the scheme layer of their business run professionally. We map your products and trade against the schemes under the Foreign Trade Policy, prepare and file the applications, track the export obligations and the claims, reconcile the scheme positions with the GST refunds and drawback, and keep the incentives flowing year after year.

How It Works

  1. 1

    Scheme Eligibility Map

    We map your exports against the incentive schemes under the Foreign Trade Policy.

    Harun Raaj & Associates does this3-5 days
  2. 2

    Benefit Quantification

    We quantify the duty savings and incentives each scheme would deliver.

    Harun Raaj & Associates does this3-5 days
  3. 3

    Applications & Claims

    We prepare and file the scheme applications and the claims with DGFT and Customs.

    Harun Raaj & Associates does this1-3 weeks
  4. 4

    Obligation & Claim Tracking

    We track the export obligations and the claim status across the schemes.

    Harun Raaj & Associates does thisOngoing
  5. 5

    Reconciliation & Closure

    We reconcile the schemes with the GST refunds and drawback and close the files cleanly.

    Harun Raaj & Associates does thisPeriodic

Frequently Asked Questions

What export obligation does an EPCG authorisation impose and what happens if it is not met?
Under the Export Promotion Capital Goods scheme (FTP 2023, Para 5.01), capital goods are imported at zero customs duty. The authorisation holder must fulfil an export obligation equal to 6 times the duty saved within 6 years from the date of issue (Para 5.04). Non-fulfilment triggers demand of the differential customs duty along with interest under Customs Act 1962, Section 28, and may also attract a penalty under Section 114A.
How does Advance Authorisation work and what is the export obligation period?
Advance Authorisation under FTP 2023, Para 4.03 permits duty-free import of inputs physically incorporated in the export product, subject to Standard Input Output Norms (SION) notified by DGFT. The export obligation must be fulfilled within 18 months from the date of issue (Para 4.22). Certain sensitive inputs attract a pre-import condition under Customs Notification No. 18/2015-Cus. Failure to export triggers duty recovery under Customs Act 1962, Section 28 plus interest.
Can a manufacturer-exporter claim both All Industry Rate duty drawback and IGST refund on the same export?
No. Under Customs Act 1962, Section 75 read with Drawback Rules 2017, Rule 3(1)(b), the AIR drawback is not available to the extent that input tax credit has already been claimed or the IGST refund has been availed under CGST Act 2017, Section 54(3) read with Rule 96 of CGST Rules 2017. An exporter must choose one route; claiming both on the same shipment results in demand and recovery by Customs.
What is the RoDTEP scheme and which categories of exports are excluded?
Remission of Duties and Taxes on Exported Products (RoDTEP) reimburses embedded central, state, and local levies not otherwise refunded, as notified under Customs Notification No. 76/2021-Cus. dated 24 August 2021. Exports made under Advance Authorisation, by EOU/EHTP/STP/BTP units, and exports subject to export duty are excluded from RoDTEP benefits (FTP 2023, Para 4A.06). Eligible credits are issued as transferable electronic scrips in ICEGATE.
What are the GST consequences of exporting under LUT versus with payment of IGST?
Under CGST Act 2017, Section 16(3) read with Rule 96A of CGST Rules 2017, a registered exporter may file a Letter of Undertaking in Form RFD-11 to export without paying IGST and then claim a refund of accumulated input tax credit under Section 54(3). Alternatively, the exporter may pay IGST and claim a refund of that tax under Rule 96. The LUT route preserves working capital since no tax is paid upfront, but the LUT is treated as cancelled if export proceeds are not realised within the period prescribed under FEMA 1999 (generally 9 months for goods, extendable by the AD bank).

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