Govt extends IGST, compensation cess exemption under various export promotion schemesDate: 23 March 2019 Tags: External Sector
Government has extended Integrated Goods and Service Tax (IGST) and compensation cess exemptions for goods procurement under certain export promotion schemes till March 2020. This decision is aimed at giving relief to exporters as they do not have to pay IGST at initial point itself. In the GST regime, exporters have to pay the indirect tax and then seek refund, which is cumbersome process.
These exemptions to exporters is for buying inputs domestically or importing for export purposes under Export Promotion Capital Goods (EPCG) scheme, export oriented unit (EOU) scheme and advance authorization of foreign trade policy 2015-20.
Export Promotion Schemes
- EPCG: It is export promotion scheme under which exporter can import certain amount of capital goods at zero duty for upgrading technology related with exports.
- Advance authorization: It is issued to allow duty free import of inputs, which is physically incorporated in export product.
- Export Oriented Units (EOU) scheme: It was introduced to boost exports, increase foreign earnings and created employment in India. Under it export oriented units are units undertaking to export their entire production of goods and services.