India has a mission to capture 2% of the global share of trade by 2010, as compared to the present level of less than 1%. Export is one of the lucrative business activities in India. The government also provides various promotional schemes to the exporters for earning valuable foreign exchange for the country and for meeting their requirements for importing modern technology and essential inputs. Besides, the income from export business is also exempted to the specified extent under the Income Tax Act, 1961, Refund of Central Excise and Custom Duty on export is also made under the Duty Drawback Scheme of the Government. There is no Sales Tax on products meant for exports.
Exports can be of goods which can be moved physically from one country to another or can be of service rendered. Detailed list of services are given in the Foreign Trade Policy covering more than 160 items e.g. Insurance, Hospital, Postal and Telecommunication etc.
Physical Exports: If the goods physically go out of the country or services are rendered outside the country then it is called as physical export. Deemed Exports: Where the goods do not go out of the country physically they can be termed as deemed exports. This will be subject to certain conditions as prescribed by the DGFT. Under Deemed Exports, the goods may be supplied to the manufacturer exporter who ultimately export a finished product of which this supply forms a part and ultimately go out of the country. E.g. Supply of fabrics to the garment exporter who exports the garments made out of the said fabric
The government may announce from time to time the types of supplies that may be considered as deemed export. The Foreign Trade Policy gives the list of supplies considered under the Deemed Export Category. The policies and procedures are different for Physical Exports and Deemed Exports as also the benefits available. In a nutshell, Deemed Exports do not enjoy all the benefits that are available under Physical Export. The Foreign Trade defines exports as taking out of India any goods by land, sea, air. Although the act does not term them as "Physical Exports", we have to put phrase to distinguish it from "Deemed Exports" which is sales in India but considered as exports for limited purpose.
[...] QUALITY CONTROL AND PRE-SHIPMENT INSPECTION Realizing the importance of the need for supplying quality goods as per international standards, the Government of India has introduced Compulsory Quality Control and Pre-Shipment Inspection of over 1050 items of export under Export (Quality Control and Pre-Shipment Inspection) Act 1963. At present, the export items that are subjected to compulsory inspection includes food and agricultural products, chemicals, engineering, coir, jute and footwear. Compulsory Pre-shipment Inspection: Foods and Agriculture & Fishery Mineral & Ore Organic & Inorganic Chemicals Refectories & Rubber Products Foot wear & Foot wear components Ceramic Products & Pesticides Light Eng. [...]
[...] the bank who confirms the L/C takes the responsibility of making the final payment to the beneficiary upon negotiation of the document in strict compliance with the terms and conditions of the Letter of Credit. By this process the final payment will be made in the beneficiary's country by the bank which confirms the L/C immediately upon negotiation of the documents. The beneficiary do not stand the risk of waiting for the document to reach the opening bank who will have the final say so to the compliance under the L/C before making the payment. [...]
[...] This transitional facilitation measure will be available for a period of two months i.e., upto 30th November For determining the validity date of the quota, the relevant date would be the date on which the full consignment is presented for examination and the date to recorded in the system The certificate of other agencies, such as, the Cotton Textiles Export Promotion Council; the Wildlife Inspection Agency under CITES; the Engineering Export Promotion Council; the Agricultural Produce Export Development Agency (APEDA), the Central Silk Board and the All India Handicraft Board should also be obtained on the invoice. [...]
[...] You should first acknowledge the export order, and then proceed to examine carefully in respect of Items Specification Pre-shipment inspection Payment conditions Special packaging Labeling and marketing requirements Shipment and delivery date Marine insurance Documentation requirement etc. If you are satisfied on these aspects, a formal confirmation should be sent to the buyer, otherwise clarification should be sought from the buyer before confirming the order. After confirmation of the export order immediate steps should be taken for procurement/manufacture of the export goods. [...]
[...] These forms are available for sale in Reserve Bank of India Export declaration forms have utmost importance and are binding on the exporters. It is, therefore, necessary that enough care is taken while declaring exports on these forms, with special reference on the following points. Name and address of the authorized dealer through whom proceeds of exports have been or will be realized should be specified in the relevant column of the form. Details of commission and discount due to foreign agent or buyer should be correctly declared otherwise difficulties may arise at the time of remittance of such commission. [...]
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